Eliciting pension beneficiaries' sustainability preferences: Why and how?

We explore whether beneficiaries of pension plans should have a voice in their funds’ sustainable investments, and we hypothesize that the answer to this question depends on funds’ legal and societal contexts, benchmarking pressures, and fund-specific factors such as fund size and board composition. Only in a very limited number of funds do we find that the ultimate owners of the entrusted investments have direct involvement in decisions. Nevertheless, it is becoming increasingly clear that pension funds cannot simply ignore the many calls for action by substantial parts of their membership. In response, some pension funds have started a dialogue with their participants, mainly using survey instruments. We provide an example of a fund that gave its participants a real vote, while avoiding the pitfalls that come with hypothetical surveys on individual preferences.