Pension Funds & the Principles for Responsible Investment: Multiplying Stakeholder Salience?

ICMA Centre Discussion Paper 2016-07

67 Pages Posted: 5 Oct 2016 Last revised: 19 Mar 2017

See all articles by Andreas G. F. Hoepner

Andreas G. F. Hoepner

Smurfit Graduate Business School, University College Dublin; Stockholm School of Economics - Mistra Financial Systems (MFS); European Commission's Technical Expert Group for Sustainable Finance

Arleta Majoch

University of Reading - ICMA Centre

Xiaoyan Zhou

University of Oxford-Smith School of Enterprise and the Environment

Date Written: October 4, 2016

Abstract

From a simple idea to unite pension funds in their quest for responsible investment at its launch in April 2006, the United Nations supported Principles for Responsible Investment (PRI) have grown in just one decade into an initiative with more than 1,500 fee paying signatories. These signatories consist of asset owners (e.g. pension funds, charities), the asset managers that serve them and service providers to both groups. Jointly, the PRI’s signatories hold over $60 trillion in assets under management, which makes PRI into one of the more prevalent non-for-profit organisations worldwide. This paper undertakes an empirical investigation of the stakeholder relationships PRI and its asset owner signatories during five crucial years of PRI’s emergence: 2007-2011. Guided by stakeholder salience theory, we explore the factors that drive asset owners to subscribe to PRI. Statistically analyzing a variety of public data sources, we overcome the limitations of Majoch et al.’s (2016) content analysis based on PRI’s self-reported data. We find that for asset owners the most salient factors are utilitarian power, societal and pragmatic legitimacy, management values, and coalition building though the relevance of individual factor is not static but evolves over time with PRI’s emergence.

Keywords: Legitimacy, Pension Funds, Power, Principles for Responsible Investment (PRI), Stakeholder Salience Theory

JEL Classification: G22, G23, G34, H55, M14

Suggested Citation

Hoepner, Andreas G. F. and Majoch, Arleta and Zhou, Xiaoyan, Pension Funds & the Principles for Responsible Investment: Multiplying Stakeholder Salience? (October 4, 2016). ICMA Centre Discussion Paper 2016-07. Available at SSRN: https://ssrn.com/abstract=2847773 or http://dx.doi.org/10.2139/ssrn.2847773

Andreas G. F. Hoepner

Smurfit Graduate Business School, University College Dublin ( email )

Blackrock, Co. Dublin
Ireland

Stockholm School of Economics - Mistra Financial Systems (MFS) ( email )

MISUM
Box 6501, SE-113 83 Stockholm
Sweden

European Commission's Technical Expert Group for Sustainable Finance ( email )

2 Rue de Spa
Brussels, 1000
Belgium

Arleta Majoch (Contact Author)

University of Reading - ICMA Centre ( email )

Whiteknights Park
P.O. Box 242
Reading RG6 6BA
United Kingdom

Xiaoyan Zhou

University of Oxford-Smith School of Enterprise and the Environment

South Parks Road
P.O. Box 242
Oxford, Oxfirdshire OX1 3QY
United Kingdom
7921513972 (Phone)
7921513972 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
64
Abstract Views
376
rank
348,241
PlumX Metrics