Global Pensions and ESG: Is There A Better Way?

The influence of ESG factors has been growing exponentially in the last five years. This paper explores whether purpose with multiple stakeholders, responsibility for the impact of investments, and system level engagement apply to global pension funds. Aside from government spending, global pension assets represent the largest pool of capital on the planet with the longest time horizon and multiple stakeholders across different generations. The power of influence of this capital is enormous. Many international challenges can only be solved with global intergenerational mindset. Global pensions have great potential to address global critical issues, but our global investment value chain has mostly been missing the ‘voice from the top.’ Society would be amiss not to harness the power of this capital, but for this to happen, pension funds need to go through a transformational change which involves strengthened governance, system-wide collaboration, and innovation.