Responsible Investing of Pension Assets: Links between Framing and Practices for Evaluation

Abstract

Despite the increase in the acceptance of responsible investing (RI) in general (Allianz, in www.allianzglobalinvestors.com , 2010), the global community is still witnessing unprecedented levels of practices that can only be categorized as “unsustainable”. It appears, then, that either the inroads made by the RI community have not kept up with the increase in unsustainable practices, or, that the RI process itself has been ineffective at producing meaningful change. The current study aims to investigate the practices used by pension plan sponsors to determine how they may enable, or interfere with, the adoption of implementation of RI. We adopt Framing Theory (Benford and Snow, Annual Review of Sociology 26:611–639, 2000), specifically the idea that particular frames find alignment when they resonate with their targets, by either bridging, extending, amplifying or transforming a domain. We extend research to include understudied practices by performing an analysis of 60 public pension funds in Canada. We find evidence of disconnect between the financial frame which dominates practices for compliance and evaluation, and the social frame of RI as a source of change. If the aim of RI is to produce long-term change, then a consideration of whether it aligns with extant practices is critical. We discover a variety of frame alignment tactics already employed in practice. We also find that, even within the dominant financial frame, opportunities for frame extension, amplification and transformation do exist, and examine how these are more (or less) possible depending on how the asset management structure is designed.