Socially Responsible Investors and ESG performance: The impact of foreign investors

This study examines the association between socially responsible investor (SRI) ownership and the ESG performance of 30 Italian listed companies over the period 2018–2022. We consider both the composite ESG score and its Environmental, Social and Governance pillars. SRIs are institutional investors that are signatories to the United Nations Principles for Responsible Investment (UN PRI). A distinctive feature of the study is its comparison of domestic and foreign SRI ownership. Using panel regressions with firm- and year-fixed effects and ESG data from Refinitiv, the results show that total SRI ownership is positively associated with the composite ESG score. The disaggregated analysis indicates that foreign SRI ownership is positively associated with the composite ESG score, whereas domestic SRI ownership is positively associated only with the Governance score. The presence of a sustainability committee is also positively associated with the composite ESG score and the Social pillar, highlighting the complementary role of internal governance mechanisms and external investor expectations. The study contributes to the limited evidence from single-country settings and shows that treating responsible investors as a homogeneous category may obscure meaningful differences associated with investor origin. The findings offer useful insights for policymakers, corporate boards and asset managers seeking to strengthen responsible investment and corporate sustainability practices in Italy.