Global socially responsible investing: The SRI of US pension plans in the UK

Document Type

Conference Proceeding

Publication Date

1-1-2006

Abstract

Socially responsible investing based on corporate social performance (CSP) as well as corporate financial performance (CFP) criteria is becoming part of the mainstream among US, UK, and other investment communities. At the same time, in many investment markets an increasing portion of equity is not owned directly by individuals but rather is owned by institutional intermediaries or investors including pension plans; and globalization has augmented available investment opportunities. Based on these trends, we address the research question Do US pension plans engage in socially responsible investing in their non-domestic investing? We compare US and UK pension plan investments in the UK FTSE 300, a market of social and financial investing opportunities similar to the US S&P 500. A series of hypotheses is developed and tested based on the pension plans' two countries of origin; four types of pension plans; and three CSP dimensions of environment, workplace, and community. Firms in the pension plans' portfolios are evaluated on these CSP and various CFP criteria. Among US pension plan types, we found that union plan portfolios are positively related to workplace practices and private plan portfolios to the community dimension. UK local, foundation, and private plan portfolios have a positive relationship with the environment dimension, and UK union plan portfolios have a positive relationship with workplace practices. The paper's contributions include an extended typology of pension plans as institutional investors, and theory development and empirical testing regarding the socially responsible investing of US institutional investors outside of their domestic market.

Identifier

85207379142 (Scopus)

Publication Title

Academy of Management Annual Meeting Proceedings

External Full Text Location

https://doi.org/10.5465/ambpp.2006.27182150

e-ISSN

21516561

ISSN

00650668

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