Do renewable energy mutual funds advance towards clean energy-related sustainable development goals?

This study examines the effects of sustainable energy-focused institutional shareholders on corporate sustainable energy performance. It employs a sample of 43 renewable energy mutual funds and 1074 portfolio firms covering 2006 to 2019. To examine this relationship appropriately, the study adopts Petersen's (2009) panel data approach and clusters standard errors by firm and year. The results indicate that institutional investors lead firms to improve their corporate sustainable energy and environmental performance. Therefore, investment decisions adopted by renewable energy mutual funds achieve positive outcomes in the real world. This has policy implications, showing that economic policies focused on financing the transition of the real economy towards sustainability and improving the financial sector's contribution to sustainability goals are being achieved.(c) 2022 The Author. Published by Elsevier Ltd. This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Automated summary

This study examines the impact of sustainable energy-focused institutional shareholders on corporate sustainable energy performance. The findings suggest that institutional investors play a significant role in driving improvements in corporate sustainable energy and environmental performance.