Research seminar on pension funds by Isaac Otchere

How does sustainable investing impact pension funds?

A catered lunch will be available from 11:30 AM for in-person attendees.

Description:

Pension funds can influence the behaviour of investee firms because of their financial might and long-term focus. As a result, they are being pressured to refocus their investment strategies on ESG principles to achieve sustainable growth. We examine the impact of sustainable investing on pension fund assets in the OECD countries after the introduction of the SDG goals and find that the growth of pension assets in countries with high sustainability scores has reduced. The effects are stronger in EU countries with high sustainability scores.

This finding is noteworthy as EU countries are particularly known for their leadership in sustainable development. Capital market returns are the primary source through which sustainable investing contributes to a reduction in pension assets. Overall, our findings imply that there are significant unintended costs associated with the transition toward sustainable development that hurt the growth of pension funds. In an environment of low fertility rate and ageing population in the OECD countries, the costs exacerbate sustainability problems facing pension funds.

Biography:

Isaac Otchere is a Professor of Finance, Sprott School of Business; a Resource Person for the African Economic Research Consortium (AERC); and a Fellow of the Carnegie African Diaspora Program. He serves on the editorial boards of many Finance and International Business journals.

With particular expertise in Finance and five main overlapping research spheres, Isaac studies (1) the impact of sustainable finance on firm outcomes; (2) the relationship between political connections and corporate risk-taking behaviour of politically-connected firms and their non-connected rivals; (3) the impact of foreign (cross-border) takeovers on the competitiveness of Canadian firms and on the national economy; (4) the relation between corporate board gender diversity, risk taking and firm performance, particularly the moderating role of culture in the board gender diversity-risk-taking nexus; and (5) the effects of the Ontario Salary Disclosure Act (also known as the Sunshine List).