Get Real! Individuals prefer more sustainable investments
A majority of people want their pension funds to invest their money sustainably. That was the outcome of a major survey of members of a Dutch pension fund by three academics from Maastricht University.
The study by Rob Bauer, Tobias Ruof and Paul Smeets gave a real vote to 3,256 members of an unnamed Dutch fund which had 18.7 billion of assets under management in 2016. This defined benefit pension scheme invests on behalf of its members, who were asked to help formulate the fund’s future sustainable investment strategy, and what kinds of investments they favored. The board guaranteed that it would implement the outcome of the voting.
The study found that 66.7% of the participants favored investing their pension savings in a sustainable manner. This choice was driven by social preferences, and comparisons with a hypothetical study run in tandem with the real survey was able to rule out financial beliefs, confusion, or a lack of information as an explanation for the members’ enthusiasm for sustainability.
It therefore concluded that institutional investors would benefit from taking their clients' social preferences seriously. This would have consequences for future asset prices and the fulfillment of the United Nations Sustainable Development Goals, to which most asset managers are now committed.
