Skip to main content
SpringerLink
Log in

Sovereign Wealth Funds and Public Financing for Climate Action

  • Living reference work entry
  • First Online:
Climate Action

Part of the book series: Encyclopedia of the UN Sustainable Development Goals ((ENUNSDG))

Definitions

Sovereign wealth funds (SWFs) are savings and investment vehicles established out of receipts from the extractive and trading operations of finite natural resources, trade surpluses, or pension contributions. Serving primarily fiscal and macroeconomic purposes and/or intergenerational welfare purposes, SWFs hold, manage, and/or administer assets with financial objectives, developing a set of investment strategies. SWFs vary in geographical distribution, source of wealth, and objectives. Numerous SWFs are found in developing countries, and a significant number of SWFs manage revenues from hydrocarbon exports.

Introduction

The 2018 Special Report of the Intergovernmental Panel on Climate Change calls for measures to limit global warming to 1.5 °C, beyond which the risk of drought, floods, extreme heat, and poverty for hundreds of millions of people will significantly worsen. There is thus immediate need to implement globally robust climate policies and to transform the energy...

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution

Institutional subscriptions

References

  • Aguilera R, Capape J, Santiso J (2016) Sovereign wealth funds: a strategic governance view. Acad Manag Perspect 30(1):5–23

    Article  Google Scholar 

  • Ahmadov I, Tsani S, Aslanli K (2011) Sovereign wealth funds as the emerging players in the global financial arena: characteristics, risks and governance. In: Sovereign wealth funds: new challenges for the Caspian countries. Public Finance Monitoring Center, Khazar University, Azerbaijan and Revenue Watch Institute NY

    Google Scholar 

  • Aizenman J, Glick R (2009) Sovereign wealth funds: stylized facts about their determinants and governance. Int Financ 12(3):351–386

    Article  Google Scholar 

  • Al-Hassan A, Papaioannou M, Skancke M, Sung CC (2013) Sovereign wealth funds: aspects of governance (IMF working paper 13/231). International Monetary Fund, Washington, DC

    Google Scholar 

  • Avendano R, Santiso J (2009) Are sovereign wealth funds’ investments politically biased? A comparison with mutual funds. OECD, Development Centre working paper no 283

    Google Scholar 

  • Barnett S, Ossowski R (2003) Operational aspects of fiscal policy in oil producing countries. In: Davis JM, Ossowski R, Fedelino A (eds) Stabilization and savings funds for nonrenewable resources. International Monetary Fund, Washington, DC

    Google Scholar 

  • Bauer A (2015) Why Sovereign Wealth Funds should not invest at home. IMF Public Financial Management Blog. Last accessed on 24 June 2020. https://blog-pfm.imf.org/pfmblog/2015/04/why-sovereign-wealth-funds-should-not-invest-at-home-.html

  • Braunstein J (2016) Sovereign wealth funds and ethical investment guidelines: the role of regime type. Available at: https://doi.org/10.2139/ssrn.2922177

  • Carrington D (2019) ‘Historic breakthrough’: Norway’s giant oil fund dives into renewables. https://www.theguardian.com/environment/2019/apr/05/historic-breakthrough-norways-giant-oil-fund-dives-into-renewables. Accessed 18 Oct 2019

  • Coutinho L, Georgiou D, Heracleous M, Michaelides A, Tsani S (2013) Limiting fiscal procyclicality: evidence from resource-rich countries. Centre for Economic Policy Research discussion paper 9672

    Google Scholar 

  • Das US, Lu Y, Mulder C, Sy A (2009) Setting up a sovereign wealth fund: some policy and operational considerations (IMF working paper 09/179). International Monetary Fund, Washington, DC

    Google Scholar 

  • Davis J, Ossowski R, Daniel J, Barnett S (2001) Stabilization and savings funds for nonrenewable resources: experience and fiscal policy implications. IMF occasional paper no 205. International Monetary Fund, Washington, DC

    Google Scholar 

  • Friedman M (1957) A theory of the consumption function. Princeton University Press, Princeton

    Book  Google Scholar 

  • Gelb A, Tordo S, Halland H (2014) Sovereign wealth funds and long-term development finance (Policy research working paper 6776). World Bank, Washington, DC

    Google Scholar 

  • Gelpern A (2011) Sovereignty, accountability, and the wealth fund governance conundrum. Asian J Int Law 1(2):289–320

    Article  Google Scholar 

  • Gilson RJ, Milhaupt CJ (2008) Sovereign wealth funds and corporate governance: a minimalist response to the new mercantilism. Stanford Law Rev 60(5):1345–1370

    Google Scholar 

  • Graves L (2016) Abengoa sells Shams Power Company stake to Masdar. https://www.thenational.ae/business/abengoa-sells-shams-power-company-stake-to-masdar-1.181088

  • Haberly D (2011) Strategic sovereign wealth fund investment and the new alliance capitalism: a network mapping investigation. Environ Plann 43(8):1833–1852

    Article  Google Scholar 

  • Halland H, Noel M, Tordo S, Owens J (2017) Will sovereign wealth funds go green? https://blogs.worldbank.org/psd/will-sovereign-wealth-funds-go-green. Accessed 18 Oct 2019

  • Inderst G, Kaminker C, Stewart F (2012) Defining and measuring green investments: implications for institutional investors “asset allocations”. OECD working papers on finance, insurance and private pensions, no 24. OECD Publishing, Paris

    Google Scholar 

  • Johan SA, Knill A, Mauck N (2013) Determinants of sovereign wealth fund investment in private equity vs. public equity. J Int Bus Stud 44(2):155–172

    Article  Google Scholar 

  • Kotter J, Lel U (2011) Friends or foes? Target selection decisions of sovereign wealth funds and their consequences. J Financ Econ 101(2):360–381

    Article  Google Scholar 

  • Local (2019) Norway’s wealth fund to double green energy investment cap. https://www.thelocal.no/20190406/norways-wealth-fund-to-double-green-energy-investment-cap. Accessed 20 Oct 2019

  • Miceli V (2013) Do sovereign wealth funds herd in equity markets? Quant Financ 13(10):1503–1518

    Article  Google Scholar 

  • One Planet (2018) Integrating climate change risks and investing in the smooth transition to a low emissions economy. https://oneplanetswfs.org. Accessed 20 Oct 2019

  • Ossowski R, Villafuerte M, Medas PA, Thomas T (2008) The role of fiscal institutions in managing the oil boom. Occasional paper 260. International Monetary Fund, Washington, DC

    Google Scholar 

  • PRI-Novethic (2017) Investor action on climate change. A PRI-Novethic assessment of global investor practices. https://www.unpri.org/download?ac=1871. Accessed 20 Oct 2019

  • Rose P (2013) Sovereign investing and corporate governance: evidence and policy. Fordham J Corp Financ Law 18(4):913–962

    Google Scholar 

  • Sharma R (2017) Sovereign wealth funds investment in sustainable development sectors. Global Projects Center, Stanford University. High-level conference on financing for development and the means of implementation of the 2030 agenda for sustainable development. http://www.un.org/esa/ffd/wp-content/uploads/sites/4/2017/11/Background-Paper_Sovereign-Wealth-Funds_16-Nov.pdf. Accessed 20 Oct 2019

  • SWFI (2017) Masdar acquires a 25% stake in an offshore north sea wind farm. https://www.swfinstitute.org/news/52768/masdar-acquires-a-25-stake-in-an-offshore-north-sea-wind-farm. Accessed 19 Oct 2019

  • SWFI (2019) Top 100 largest fund rankings by total assets. Sovereign Wealth Fund Institute. https://www.swfinstitute.org/fund-rankings. Accessed 20 Oct 2019

  • Tsani S (2011) Natural resources, governance and institutional quality: the role of resource funds. University of Reading, School of Economics, Centre for Euro-Asian Studies, Reading

    Google Scholar 

  • Tsani S (2013) Natural resources, governance and institutional quality: the role of resource funds. Resour Policy 38(2):181–195

    Article  Google Scholar 

  • Tsani S (2015) On the relationship between resource funds, governance and institutions. Evidence from quantile regression analysis. Resour Policy 44:94–111

    Article  Google Scholar 

  • Tsani S, Ahmadov I, Aslanli K (2011) Governance, transparency and accountability in sovereign wealth funds: remarks on the assessment, rankings and benchmarks to date. In: Sovereign wealth funds: new challenges for the Caspian countries. Public Finance Monitoring Center, Khazar University, Azerbaijan and Revenue Watch Institute NY

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, University of Ioannina, Athens, Greece

    Stella Tsani

  2. Norwegian Institute of International Affairs (NUPI), Oslo, Norway

    Indra Overland

Authors
  1. Stella Tsani
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Indra Overland
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Stella Tsani .

Editor information

Editors and Affiliations

  1. European School of Sustainability, Hamburg University of Applied Sciences, Hamburg, Hamburg, Germany

    Walter Leal Filho

  2. Center for Neuroscience & Cell Biology, University of Coimbra, Coimbra, Portugal

    Anabela Marisa Azul

  3. Faculty of Engineering and Architecture, Passo Fundo University Faculty of Engineering and Architecture, Passo Fundo, Brazil

    Luciana Brandli

  4. Istinye University, Istanbul, Turkey

    Pinar Gökcin Özuyar

  5. International Centre for Thriving, University of Chester, CHESTER, UK

    Tony Wall

Section Editor information

  1. Department of Business and Law, University of Milano-Bicocca, Milan, Italy

    Federica Doni

Rights and permissions

Reprints and permissions

Copyright information

© 2020 Springer Nature Switzerland AG

About this entry

Check for updates. Verify currency and authenticity via CrossMark

Cite this entry

Tsani, S., Overland, I. (2020). Sovereign Wealth Funds and Public Financing for Climate Action. In: Leal Filho, W., Azul, A., Brandli, L., Özuyar, P., Wall, T. (eds) Climate Action. Encyclopedia of the UN Sustainable Development Goals. Springer, Cham. https://doi.org/10.1007/978-3-319-71063-1_130-1

Download citation

  • DOI: https://doi.org/10.1007/978-3-319-71063-1_130-1

  • Received:

  • Accepted:

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-71063-1

  • Online ISBN: 978-3-319-71063-1

  • eBook Packages: Springer Reference Earth and Environm. ScienceReference Module Physical and Materials ScienceReference Module Earth and Environmental Sciences

Publish with us

Policies and ethics

Search

Navigation