Pension Funds and Sustainable Investment: Comparing Regulation in the Netherlands, Denmark, and Germany
The central aim of this project is to compare national regulation of sustainable investment by pension funds. Survey research shows that considerable national differences in sustainable investment (SI) by pension funds continue to exist in Europe and it identifies regulation as one of the drivers for SI (Eurosif 2016). For this reason, it is relevant to explore if and how national regulations impose constraints or offer opportunities for SI by pension funds. The project employs a broad conceptualization of regulation, incorporating 1) national legislation, 2) regulatory activities by supervisory agencies and 3) self-regulation by the pension fund sector itself. We define sustainable investment as an approach to investment that considers environmental, social and governance (ESG) factors in portfolio selection and management. In the study, we will focus on three types of regulation influencing sustainable investment by pension funds: 1) corporate governance rules regarding voting of ESG criteria, 2) investment regulations, that prohibit or mandate investment in particular asset classes; and 3) rules regarding the fiduciary duties of pension fund trustees.