Which institutional investors drive corporate sustainability? A systematic literature review

In this article, we review recent archival research (66 studies) on the influence ofinstitutional ownership (IO) heterogeneity on corporate sustainability. Relying on anagency-theoretical framework, we differentiate between various types of IO andtheir nature. We found that most prior research concentrates on the impact of IOheterogeneity on corporate sustainability performance. Long-term, sustainable, andforeign IO leads to better ESG/CSR outputs. Based on the business case argumentfor corporate sustainability, long-term institutional investors moderate the positivelink between corporate sustainability and future financial performance. We provideuseful recommendations for future research by focusing on endogeneity concerns asmethodological challenges and content-related proposals for future research designs