The more a pension fund brags about being "sustainable," the more money it actually seems to lose.
SSRN · March 13, 2026 · 6268458
Why it matters
Analyzing 20 years of data, researchers found a significant negative link between sustainability transparency and benchmark outperformance. This suggests that the transparency itself is a marker for stricter investment constraints and exclusions that directly reduce the retirement savings of the fund's members.
From the abstract
The Prudent Person Rule is a central part of trust investment law for pension funds. We examine its relationship with pension fund performance by constructing fund-level disclosure indices that capture the degree of attention devoted to four Prudent Person dimensions in annual reports: Investment Policy, Risk Management, Governance, and Sustainability. To construct them, we create a machine-learning assisted lexicon based on 2,052 Dutch pension fund annual reports for 2003-2023. Over the sample