The Drivers of Responsible Investment: The Case of European Pension Funds

We investigate what drives responsible investment of European pension funds. Pension funds are institutional investors who assure the income of part of the population for a long period of time. Increasingly, stakeholders hold pension funds accountable for the non-financial consequences of their investments and many funds have engaged in responsible investing. However, it appears that there is a wide difference between pension funds in this respect. We investigate what determines pension funds’ responsible investments on the basis of a survey of more than 250 pension funds in 15 European countries in 2010. We use multinomial logistic regression and find that especially legal origin of the country, ownership of the pension fund and fund size-related variables are to be associated with pension funds′ responsible investment. For fund size, we establish a curvilinear relationship; especially the smallest and largest pension funds in the sample tend to engage with responsible investing.     

Modelling inundation patterns and sediment dynamics in the extensive floodplain along the Tonle Sap River

The Tonle Sap River (TSR) serves as a natural medium for the reversal flow between Tonle Sap Lake (TSL) and the Mekong River to sustain productivity and biodiversity in the TSR floodplain and TSL. Understanding the hydrological connectivity and its dynamics in the TSR, including its floodplain, is therefore important to support activities that aim to maintain ecological services in the TSR–TSL system. Thus, the main objective of this study is to examine the hydrological connectivity of the TSR and its floodplain by a modelling approach that integrates inundation patterns and sediment dynamics. The Caesar–Lisflood model was applied to describe inundation, sediment erosion, transport, and deposition in the TSR for the period of 2003–2013. The inundation areas connected to the TSR ranged from 140 to 2,327 km², whereas the isolated inundation areas from the TSR ranged from 0.27 to 504 km². Sediment dynamics showed its influence on inundation patterns and hydrological connectivity and could alter the yearly inundation ratio (defined as a normalized inundation frequency with a value ranging from 0 to 1) up to 0.8. Our approach provides a quantitative way to determine key factors (e.g., total inundation areas, seasonality, and connectivity of inundation patterns) for further investigation of ecological processes in relation to the inundation patterns and sediment dynamics in the TSR and TSL.     

Drivers of Socially Responsible Investing: A Case Study of Four Nordic Countries

In this study, we try to establish what determines the substantial differences in the Nordic countries’ size and composition of socially responsible investing (SRI). We investigate if these differences between Denmark, Finland, Norway, and Sweden can be associated with key characteristics in economics, finance, culture, and institutions. We find that in particular economic openness, the size of the pension industry, and cultural values of masculinity (femininity) and uncertainty avoidance can be associated with the differences in SRI in the four countries. On basis of these findings, we lay foundations for an international theory of SRI.     

The PR Premium

Press releases (PR) are the most common and popular way for a firm to publicize its news. The annual number of PR varies substantially among firms, from just a few to hundreds. This work documents a gap in stock's returns between firms that publish low and high number of PR per annum in favor of the former. This gap was found for both the year of publication and the following one and its magnitude is 7–8% and 5–6%, respectively. This gap remains intact even after controlling for firm characteristics such as beta, market capitalization and more. I call this gap the “PR Premium.”     

Practicalities bottleneck to pension fund responsible investment?

We found that pension funds may face a bottleneck as practical impediments to engaging in responsible investment with respect to the role played by defining and implementing responsible investment. Furthermore, pension funds seek additional coherence and practical guidelines in this field to enable them to take into account ethical considerations in their investment strategies and in implementing them. These findings indicate that the availability of information may affect the stance that key decision makers of pension funds adopt towards responsible investment.     

European Pension Funds and Sustainable Development: Trade‐Offs between Finance and Responsibility

Pension funds try to account for sustainable development in their operations. This mainly translates in responsible investing. We investigate how this interacts with the financial objectives. We use a survey of more than 250 pension funds based in 15 European countries. Multinomial logistic regression is used to find out how pension funds trade off sustainable development and financial objectives. Our findings suggest that pension funds that have not included responsibility in their strategy and investments have a clear priority regarding their financial performance. Pension funds who integrate sustainable development in their strategy can bring balance between finance and responsibility. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Sequester or substitute—Consequences of increased production of wood based energy on the carbon balance in Finland

Forests play an important role in mitigating climate change. Forests can sequester carbon from the atmosphere and provide biomass, which can be used to substitute for fossil fuels or energy-intensive materials. International climate policies favor the use of wood to substitute for fossil fuels rather than using forests as carbon sink. We examine the trade off between sequestering carbon in forests and substituting wood for fossil fuels in Finland. For Finland to meet its EU targets for the use of renewable energy by 2020, a considerable increase in the use of wood for energy is necessary. We compare scenarios in which the wood energy targets are fully or partially met to a reference case where policies favoring wood based energy production are removed. Three models are used to project fossil fuel substitution and changes in forest carbon sinks in the scenarios through 2035.Finnish forests are a growing carbon sink in all scenarios. However, net greenhouse gas (GHG) emissions will be higher in the medium term if Finland achieves its current wood energy targets than if the use of energy wood stagnates or decreases. The volume of GHG emissions avoided by replacing coal, peat and fossil diesel with wood is outweighed by the loss in carbon sequestered in forests due to increased biomass removals. Therefore, the current wood energy targets seem excessive and harmful to the climate. In particular, biodiesel production has a significant, negative impact on net emissions in the period considered. However, we did not consider risks such as forest fires, wind damage and diseases, which might weaken the sequestration policy. The potential albedo impacts of harvesting the forests were not considered either.     

Tonle Sap Lake: Current status and important research directions for environmental management

Tonle Sap Lake (TSL) in Cambodia is the largest freshwater body in South‐East Asia and one of the most productive ecosystems in the world. The lake and its ecosystems are widely under threat, however, due to anthropogenic activities occurring inside and outside its basin (e.g., water infrastructure development; land use change), being poorly understood in most aspects. This study provides an updated review of the state of knowledge of the TSL ecosystem, as well as important research directions for sustainable lake environmental management of Tonle Sap Lake by focusing on four major topics, including climate change and hydrology, sediment dynamics, nutrient dynamics and primary and secondary production. The findings of this study suggest anthropogenic activities in the TSL basin, as well as the Mekong, in combination together with climate changes, are key contributing factors in the degradation of the TSL ecosystem. Insufficient accurate data, however, precludes quantitative assessment of such impacts, making it difficult to quantitatively assess and accurately understand the ecosystem process in the lake ecosystem. More efforts are recommended in regard to environmental monitoring in all sub‐basins around TSL, assessing seasonal changes in nutrient and sediment inputs corresponding to water level and flow changes, assessing cumulative impacts of water infrastructure and climate change on the ecosystem dynamics, and elucidation of ecosystem processes within the lake's internal system.