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Potential of pension funds and insurance companies for investment in resources: Policies for sustainable transition

Author

Listed:
  • Liu, Bing
  • Sun, Huimin
  • Xiao, Siqing

Abstract

This study extensively explores the complex relationship between environmental investments made by pension funds and insurance companies and their influence on expenses associated with fossil fuels. Analyzing data from 2015 to 2020 across ten OECD economies, the research employs the Fully Modified OLS technique to extract meaningful insights. The results reveal that a 1% increase in environmental investments propels practices focused on energy conservation and increased efficiency by 0.49%, underscoring a dedicated commitment to sustainability. Additionally, a 1% increase in IT expenditures is associated with a 0.10% improvement in energy efficiency. Conversely, heightened green tax payments exhibit a negative correlation with energy usage, emphasizing the impact of regulatory incentives. To bolster sustainable investments, the paper advocates for robust ESG reporting, support for SMEs, the adoption of green corporate management practices, and improved access to green financial markets.

Suggested Citation

  • Liu, Bing & Sun, Huimin & Xiao, Siqing, 2024. "Potential of pension funds and insurance companies for investment in resources: Policies for sustainable transition," Resources Policy, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:jrpoli:v:89:y:2024:i:c:s0301420723013296
    DOI: 10.1016/j.resourpol.2023.104618
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    More about this item

    Keywords

    Sustainable investment; Fossil fuels consumption; Sustainable transition; Pension fund and insurance companies; OECD;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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