Beneficiaries' Attitude towards Sustainable Investments of their Pension Fund
This study investigates beneficiaries' attitude towards sustainable investment of their pension fund.
Elena Lisa Strate & Yannick Kaderli, 2019
Bachelor Thesis, Pensionskasse BEKB
Betreuende Dozierende: Fabian Schmid
Keywords: Finance, sustainability, pension fund, sustainable investments, ESG investing
Public awareness of ESG issues is growing and leads to discussions among these topics. Financial institutions are urged from diverse stakeholders to invest in sustainable products, especially as the financial sector plays a key role within the economy. Society and politics increasingly request sustainable behaviour of Swiss pension funds in the near future. Consequently, Swiss pension funds have already begun to give more attention to the environmental and social behaviour of the companies in which they invest. The retirement capital that is aggregated and managed by Swiss pension funds is owned by their beneficiaries. In contrast to the investment process of private savings, however, beneficiaries cannot directly decide about the investment strategy of this capital. Thus, it is of high importance for Swiss pension funds to understand the preferred investment approach of their beneficiaries and to know whether sustainable efforts are desired and valued.
Our Bachelor Thesis is based on Flick's linear model of research process, where we operate with a real experiment by testing hypotheses. Therefore, a literature review about sustainable investments and Swiss pension funds is concluded in a first step, followed by a detailed analysis of the investment strategy of the pension fund of the BEKB | BCBE. In order to get the beneficiaries' opinions about sustainable investments, we carry out an online survey. The data collected is analysed with the help of the statistical program SPSS. Subsequently, the hypotheses are verified with the results of our survey data. Finally, recommendations are given to the pension fund on the basis of our results and the literature review.
With the present Bachelor Thesis we identify on one hand, the current stage of sustainable investing among financial institutions. On the other hand, opinions and thoughts of beneficiaries were analysed, what determines beneficiaries' desire for sustainable investing.
Overall, we conclude that beneficiaries’ attitude towards sustainable investing is positive and they have a desire that the pension fund integrates sustainability aspects in the investment strategy. Most beneficiaries prefer the inclusion of environmental aspects and the application of the rather easily implementable exclusion approach. However, beneficiaries’ loss aversion is quite high. Even though a majority of the beneficiaries is willing to accept a lower interest payment on their retirement capital that might be caused by lower returns or higher costs of sustainable investing, most would only accept a rather small reduction. Therefore, whenever considering the expansion of sustainable investing, a detailed analysis regarding the costs and downside risks is highly recommendable.
The pension fund of the BEKB | BCBE might use this data to adapt their investment strategy in a way that supports beneficiaries' attitudes towards sustainable investments.
Studiengang: Business Administration International Management (Bachelor)
Fachbereich der Arbeit: Accounting, Banking, Controlling and Finance