State Pension Funds and Corporate Social Responsibility: Do Beneficiaries’ Political Values Influence Funds’ Investment Decisions?

Hoepner, Andreas G. F.; Schopohl, Lisa

doi:10.1007/s10551-018-4091-z

Cited by 31 publications

(17 citation statements)

References 88 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Our results show that conventional funds present large similarities to SRI funds on larger ESG-scored investee firms, suggesting that conventional funds consider the SRI-fund holdings to integrate ESG criteria. Consistent with Hoepner and Schopohl (2020) and legitimacy theory, our evidence shows that pension funds may be adopting a more holistic interpretation of beneficiaries' interests, including financial and non-financial concerns. Additionally, the commonalities between SRI and conventional funds on superior ESG stocks support the SRI integration among conventional funds.…”

Section: Discussionsupporting

confidence: 76%

“…Consistent with the framework of legitimacy theory, conventional funds including ESG criteria are fulfilling the social contract that allows the reconnaissance of their purposes, continuing to use social resources, and their survival (Deegan 2002;Lindblom 1994;Schiopoiu and Popa 2013). Thus, the SRI integration may produce the ethicalisation of investment processes, aligning portfolio-construction plans between SRI and conventional funds (Hoepner and Schopohl 2020). Nevertheless, the specific ESG goals of conventional funds depend on managers' priorities to weigh economic and ideological motives (McLachlan and Gardner 2004), which may create ambiguous ESG standards.…”

Section: Introductionmentioning

confidence: 99%

“…On the other hand, the long-term investment and the significant equity holdings make pension funds vulnerable to long-term risks. The ESG-investment criteria may help to manage these risks because ESG factors are long-term risk-management indicators (Hoepner and Schopohl 2020). Sethi (2005) finds that pension funds take long-term risks more earnestly due to their commitments to beneficiaries, promoting a more sustainable economy by engaging in responsible investment.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

The environmental, social, and governance (ESG) dimension of firms in which social responsible investment (SRI) and conventional pension funds invest: The mainstream SRI and the ESG inclusion

Alda

2021

Journal of Cleaner Production

View full text Add to dashboard Cite

This study seeks to understand whether the mainstream SRI leads to similar investment decisions in conventional and SRI pension funds. The SRI is expanding beyond specialised SRI funds and increasingly conventional pension funds are integrating firms with certain ESG criteria, in line with legitimacy-theory premises. This phenomenon raises the questions whether SRI and conventional portfolios are converging and whether SRI funds preserve their ethical essence. Using fund holdings and ESG-stock scores, we examine the inclusion level of ESG firms by UK conventional and SRI domestic equity pension funds, taking into account the investment in controversial (socially-sensitive) firms (i.e. related to tobacco, alcohol, or gambling industries, among others). We find that conventional funds consider the firms in which SRI funds invest to integrate ESG criteria. Nonetheless, SRI funds maintain larger ESG-firm standards, preserving the ethical purpose, and larger ESG standards in SRI funds do not affect performance. Our results also show that the ESG integration into conventional funds evolves over time.

show abstract

Section: Discussionsupporting

confidence: 76%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

The environmental, social, and governance (ESG) dimension of firms in which social responsible investment (SRI) and conventional pension funds invest: The mainstream SRI and the ESG inclusion

Alda

2021

Journal of Cleaner Production

View full text Add to dashboard Cite

show abstract

“…Second, we introduce a dummy for the 22 socalled 'Red List States' which voted persistently Republican in all presidential elections since 2000. 11 Given the results of Hong and Kostovetsky (2012) and especially Hoepner and Schopohl (2018b), pension funds from red states may have a negative predisposition towards PRI and substantially affect our results. The introduction of this dummy, however, does not affect our results in any meaningful manner.…”

Section: Robustness Tests and Directions For Future Researchmentioning

confidence: 91%

Does an Asset Owner’s Institutional Setting Influence Its Decision to Sign the Principles for Responsible Investment?

Hoepner

Majoch²,

Zhou

2019

J Bus Ethics

Self Cite

View full text Add to dashboard Cite

From a simple idea to unite asset owners in their quest for responsible investment (RI) at its launch in April 2006, the United Nations supported Principles for Responsible Investment (PRI) have grown in just one decade into an initiative with more than 1500 fee-paying signatories. Jointly, the PRI's signatories hold assets worth more than $80 trillion, making it one of the more prevalent not-for-profit organizations worldwide. Furthermore, the PRI's ambitious mission to transform the financial system at large into a more sustainable one makes it a worthwhile subject of inquiry from an institutional perspective. We undertake an empirical investigation of the adoption of the PRI by asset owners during five crucial years of the association's emergence: 2007-2011. Following a tripartite view of institutional theory proposed by Scott (Institutions and organizations. Foundations for organizational science, A Sage Publication Series, London, 1995), we explore if regulative, normative, and cultural-cognitive factors influence an asset owner's decision to subscribe to the PRI. Applying both parametric and nonparametric survival analysis, we find that asset owners are indeed significantly affected by normative, cultural-cognitive, and regulative aspects. In particular, (i) public service employee and labor union pension funds (ii) from social backgrounds more culturally aligned with values represented by the RI movement (iii) with historically more voluntary legislation on environmental, social, and governance (ESG) issues are most likely to sign the PRI. In contrast, institutional environments with a higher number of pre-existing mandatory ESG regulation decrease the likelihood of signing the PRI. Our results indicate that normative and cultural-cognitive factors were crucial contributors to the PRI's growth. With respect to the regulative environments, our results imply that some asset owners may use the PRI as a collective industry initiative to substitute for mandatory legislation. Conversely, a high level of historical mandatory legislation may constrain organizational resources that could otherwise be dedicated to voluntary initiatives such as PRI. Our findings are robust to relevant controls and econometric concerns.

show abstract

“…Generally, it is expected that governments are able to exert an influence on the overall agendas of SWFs but might be limited with respect to their implementation. Consistent with this assumption, Bortolotti et al [21] state that governments might influence the objectives of SWFs (political interference in SWFs, with regard to the incorporation of sustainability criteria's, is well documented [22,23]. The same is true of different party effects on investment strategies of SWFs [5,24]).…”

Section: Electoral Democracymentioning

confidence: 97%

Sovereign Wealth Funds as Sustainability Instruments? Disclosure of Sustainability Criteria in Worldwide Comparison

Wurster

Schlosser

2021

Sustainability

View full text Add to dashboard Cite

Sovereign wealth funds (SWFs) are state-owned investment vehicles intended to pursue national objectives. Their nature as long-term investors combined with their political mandate could make SWFs an instrument suited to promote sustainability. As an essential precondition, it is important for SWFs to commit to sustainability criteria as part of an overarching strategy. In the article, we present the sustainability disclosure index (SDI), an original new dataset for a selection of over 50 SWFs to investigate whether SWFs disclose sustainability criteria covering environmental, social, economic, and governance aspects into their mandate. In addition to an empirical measurement of the disclosure rate, we conduct multiple regressions to analyze what factors help to explain the variance between SWFs. We see that a majority of SWFs disclose at least some of the sustainability criteria. However, until today, only a small minority address a broad selection as a possible basis for a comprehensive sustainability strategy. While a high-state capacity and a young population in a country as well as a commitment to the international Santiago Principles are positively associated with a higher disclosure rate, we find no evidence for strong effects of the economic development level, the resource abundance, and the degree of democratization of a country or of the specific size and structure of a fund. Identifying favorable conditions for a higher commitment of SWFs could help to initiate pathways to become functional sustainability instruments.

show abstract

State Pension Funds and Corporate Social Responsibility: Do Beneficiaries’ Political Values Influence Funds’ Investment Decisions?

Cited by 31 publications

References 88 publications

The environmental, social, and governance (ESG) dimension of firms in which social responsible investment (SRI) and conventional pension funds invest: The mainstream SRI and the ESG inclusion

The environmental, social, and governance (ESG) dimension of firms in which social responsible investment (SRI) and conventional pension funds invest: The mainstream SRI and the ESG inclusion

Does an Asset Owner’s Institutional Setting Influence Its Decision to Sign the Principles for Responsible Investment?

Sovereign Wealth Funds as Sustainability Instruments? Disclosure of Sustainability Criteria in Worldwide Comparison

Contact Info

Product

Resources

About