The Universal Owner's Role in Sustainable Economic Development

摘要

Toward the end of the twentieth century, ownership of corporate equity in the United States and Great Britain has once again become relatively concentrated, but this time in the hands of institutional owners such as pension funds and mutual funds. An important implication of this concentration is that ownership has become professional and, because these institutions are fiduciary institutions, subject to the fiduciary duties of loyalty and care. Furthermore, because of an institution's size or because of an explicitly policy of indexing, many institutions have become "universal owners". A universal owner owns a small, but representative fraction of most of the companies in an economy. Thus, its ability to satisfy its fiduciary duties depends heavily on overall macroeconomic efficiency and performance rather than on the performance of any particular firm that it might own. Consequently, universal owners have a natural interest in issues of sustainable development because they receive the benefits from positive externalities generated by portfolio firms and are likewise harmed by their negative externalities.