ESG investing and public pensions

Aubry, Jean-Pierre, Anqi Chen, Patrick M. Hubbard, and Alicia Haydock Munnell. “ESG investing and public pensions”. State and Local Plans Issue in Brief 74, Chestnut Hill, Mass.: Center for Retirement Research at Boston College, October 2020. http://hdl.handle.net/2345/bc-ir:109050.
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Abstract

(1) Public pension plans have engaged in social investing since the 1970s in response to state mandates. (2) More recently, the plans themselves have embraced a "new" form of investing that incorporates environmental, social, and governance (ESG) factors. (3) ESG investing is based on the notion that taking account of non-financial factors will lead to better investment outcomes. (4) Some also believe ESG investing can further socially beneficial practices. (5) The evidence suggests, however, that social investing: 1) yields lower returns; and 2) is not effective at achieving social goals. (6) Hence, any form of social investing is not appropriate for public pension funds.

Title
ESG investing and public pensions: An update
Author
Aubry, Jean-Pierre
Chen, Anqi
Hubbard, Patrick M.
Munnell, Alicia Haydock
School
Carroll School of Management
Discipline
Finance
Center
Center for Retirement Research
Genre
report
Date Issued
October 2020
Publisher
Center for Retirement Research at Boston College
Series Title
State and Local Plans Issue in Brief
Series Number
74
Persistent Link
http://hdl.handle.net/2345/bc-ir:109050
Use Restrictions
These materials are made available for use in research, teaching and private study, pursuant to U.S. Copyright Law. The user must assume full responsibility for any use of the materials, including but not limited to, infringement of copyright and publication rights of reproduced materials. Any materials used for academic research or otherwise should be fully credited with the source. The publisher or original authors may retain copyright to the materials.
Subject
State and Local Pensions

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