The prize was awarded for the paper Investor Democracy, which examines how pension participants can influence their pension fund’s investment policy. Smeets wrote the paper with Rob Bauer of Maastricht University, Emmeline Cooper of Cranfield University and Bram van der Kroft of MIT. The research examines what happens when pension participants are able to help decide how their pension savings are invested.

Assembly: expand impact investments

The researchers collaborated with Pensioenfonds Detailhandel, the Dutch pension fund for the retail sector. First, they brought together 49 randomly selected pension participants for a 3-day investors’ assembly. Participants received information from experts, discussed the issues with one another and developed 49 recommendations for the pension fund’s board. Support for more sustainable investment rose substantially after the assembly. Before it, 24% of participants supported greater sustainable investment. Afterwards, this had increased to 63%.

One recommendation was to increase investment in impact investing. These investments seek not only financial returns, but also measurable positive social or environmental effects. All participants in Pensioenfonds Detailhandel were then able to cast a binding vote on this proposal. More than 13,600 participants voted. The largest group favoured expanding impact investments, even though they knew this could reduce their pension income. In response, the pension fund’s board decided to increase its impact investments from €300 million to €1.2 billion.

GRASFI is a global alliance of research universities working on sustainable finance and investment. This year’s conference was held at HEC Liège in Belgium. The Best Paper Prize is the conference’s main award and is sponsored by BNP Paribas Asset Management.