Wharton Pension Research Council Working Papers
 

Document Type

Working Paper

Date of this Version

7-2021

Abstract

As intergenerational stewards of capital, pension funds can have many good reasons to embrace environmental, social, and governance (ESG) issues in their investment practices. Yet the particular structure of pension funds creates both advantages and disadvantages for the integration of ESG. This paper reviews the historical origins, regulatory mandates, and fund structures of pensions, to tease out exactly which of these characteristics enable and which of them impede the inclusion of ESG at pension funds. We use the case of PSP Investments to lend depth to the application of the strategies that emerge in the pensions industry.

Keywords

sustainability, ESG integration, pensions, long-term investing, fiduciary duty

JEL Code

G2, G11, O16

Working Paper Number

WP2021-13

Copyright/Permission Statement

All findings, interpretations, and conclusions of this paper represent the views of the authors and not those of the Wharton School or the Pension Research Council. © 2021 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.

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Economics Commons

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Date Posted: 05 August 2021