On the responsible investment disclosure practices of the world's largest pension funds

Abstract

PurposeThis study seeks to measure the level of responsible investment (RI) disclosure of the world's largest pension funds.Design/methodology/approachThe public disclosure of environmental, social and governance factors by the world's largest pension funds reflect their genuine commitment to this new investment paradigm. The UNPRI criterion is employed to measure the level of public disclosure. One hour was allocated to every asset owner's web site to search and collect public information.FindingsOverall, the level of public disclosure of RI activities is not prolific. The study is negatively influenced by North American pension funds who dominate this sample. Public disclosure practices are positive for European funds. The size of funds under management positively influences the public disclosure and reflects their leadership role in the industry.Research limitations/implicationsLimitations include: the largest pension funds are dominated by North American funds and reflect the impact of fund size. The results are from the largest pension funds and may not be representative of the entire industry; the positive findings from European funds reflect a material subset of the global asset owners; and, we do not engage directly with the funds in question. Measurements are sourced from public disclosure.Originality/valueThe lack of public disclosure of RI by North American funds suggests that these institutions do not believe that it is important to investors. It suggests that these asset owners have not yet been exposed to the same influences as European funds. Given that North American funds together own substantial interests in listed corporations, they are much more important to influence than corporations.