IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i24p10874-d1541963.html
   My bibliography  Save this article

Environmental-, Social-, and Governance-Oriented Pension Funds for Young Contributors: A Win–Win Option

Author

Listed:
  • Elisa Bocchialini

    (Department of Economics and Management, University of Florence, 50121 Florence, Italy)

  • Demetrio Miloslavo Bova

    (Department of Economics and Finance, University of Rome Tor Vergata, 00133 Rome, Italy)

  • Ilaria Colivicchi

    (Department of Economics and Management, University of Florence, 50121 Florence, Italy)

  • Federica Ielasi

    (Department of Economics and Management, University of Florence, 50121 Florence, Italy)

Abstract

The world’s 300 largest pension funds manage assets for more than USD 21 trillion. A strict orientation to environmental, social, and good governance (ESG) in the investment portfolio of pension funds can play a key role in triggering the economy toward a sustainable transition. Can responsible pension plans be an attractive investment opportunity for young people? Since the performance of pension funds depends on the demographic characteristics of investors, other than the financial results of investment portfolios, this study aimed to test the convenience of ESG-oriented pension plans for young contributors aged 20–29 with different risk propensities and attitudes towards sustainability. The analysis was started using accurate data provided by an Italian pension fund, observed from 2012 to 2022. The methods applied were a Monte Carlo simulation of the individual actuarial balances, the expected utility, and the willingness to pay. The results show that ESG-oriented pension funds are convenient for young people who invest in riskier lines. Still, it is sufficient for a light green preference to persuade young contributors to invest in ESG-oriented funds and balanced lines. The results of the study can support pension fund managers in defining and offering appropriate ESG lines suitable for younger investors.

Suggested Citation

  • Elisa Bocchialini & Demetrio Miloslavo Bova & Ilaria Colivicchi & Federica Ielasi, 2024. "Environmental-, Social-, and Governance-Oriented Pension Funds for Young Contributors: A Win–Win Option," Sustainability, MDPI, vol. 16(24), pages 1-19, December.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:24:p:10874-:d:1541963
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/24/10874/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/24/10874/
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:24:p:10874-:d:1541963. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.