Study On Socially Responsible Investment Strategies Of Pension Fund

With the aggravation of the aging population, coupled with the imperfect retirement pension system, old aging and low dependency ratio are staggered, which highlights the silver poverty crisis. Based on a comprehensive analysis of the situation of pension fund, the key to solve the problem lies in implementing efficient investment management. Government should gradually relax the limitation on pension fund investment, properly expand the investment scope of national social security fund in bonds, equities, trust loans, etc., encourage the trial of annuity fund in preferred shares and enter into the field of long-term investment diversification allocation of asset, revise and improve the basic pension funds investment management system and adhere to the principle of market-oriented and diversified investment. National policy support should be used to promote market-oriented operation of pension fund and the effective investment management of pension fund so as to achieve the optimized returns.In the process of marketization of China’s pension fund, what investment philosophy and strategies of massive pension fund should be adopted is the key point for sustainable investment. Because of large-scale,long-term and social properties,pension fund is seen as the natural supporter of socially responsible investing(SRI). International pension funds insist on SRI, which can keep fund managers from conducting unethical behavior for profit and also effectively safeguard stakeholders’interests, purse better investment earnings forecast, and regulate enterprise behavior. Meantime, as a large institutional investor, pension funds SRI is not only good to achieve the goal of maintaining and increasing of the pension fund value, cultivate social responsibility consciousness and normatively guide socially responsible investment behavior of capital markets, but also speed up financial structure innovation so as to realize sustainable social and economic construction. With more than 40 years history, international pension funds continually adjust investment philosophy and strategies, springing up outstanding investment representatives such as the pension fund of CalPERS and PGGM, presenting with abundant SRI strategies. With synthetically implementing the ESG incorporation strategy, shareholder engagement strategy and the new field investment strategy, SRI will gradually become the mainstream investment strategy.Along with our SRI market normalization, government strengthens environment protection and increase the punishment strength to the unethical and illegal enterprise. CSR gradually enter a new normal, where values GDP quality not the quantity, pays attention to the balance of the economy & environment and urban & rural. What’s more, with the improvement of the capital market, the mechanisms of Shanghai-Hong Kong Stock Connect, Asian Infrastructure Investment Bank and Silk Road Fund contribute to introducing advanced SRI philosophy, which improve the development of SRI level.Based on the experience of international excellent SRI, market-oriented operation of China’s pension fund should adhere to SRI philosophy and actively explore the feasibility optimization applications of socially responsible investing strategies. In the process of pension fund market-oriented operation, SRI has important theoretical value and practical significance. This paper integrates the use of literature research and case analysis, carrying out theoretical exploration and practical research. With the international pension funds excellent SRI experience, the purpose of this study is to put forward feasible suggestions for our pension fund SRI strategies and external mechanism construction, so as to promote the development of pension fund SRI market, realize the financial profits and social benefits of pension fund, and then build a wide range of harmonious society.This paper consists of seven chapters. The main points are as follows:The first chapter explains the background and significance, summarize up the domestic and foreign related literature research situation of pension fund SRI and introduce the study methods, main content, innovation points and deficiencies of this paper.The second chapter is the SRI overview. This chapter combs the historical development process and summarizes the meaning of SRI and analyzes the causes of SRI market effective development from four aspects:avoiding using unethical behaviors for profits, maintaining the interests of enterprise stakeholders, forecasting the good investment earnings and regulating the behavior of enterprise management.The third chapter analyzes the current pension funds SRI situation in Europe, America and Asian countries (regions). Based on the status of large institutional investors, this chapter analyzes the significant meaning of pension fund SRI on realizing the optimized returns, cultivating the enterprise society responsibility consciousness, regulating the capital market behavior of SRI, promoting financial structure innovation, and boosting the construction of sustainable harmonious society.The fourth chapter introduces the current international pension funds investment strategies of SRI, analyzes the mainstream ESG incorporation strategies which include negative screening, positive screening, best-in-class, and ESG integration strategy. And then this paper introduces the shareholder engagement strategies, including filing or co-filing shareholder resolutions, actively voting proxies, engaging in dialogue with corporate management, and joining shareholder coalitions. The increasing importance of impact investing strategy is also introduced in the paper.The fifth chapter conducts relevant case analysis for the specific application of CalPERS and PGGM pension funds SRI strategies, adding the experience value of international pension funds SRI. The SRI strategies of international pension fund tend to apply diversified ESG incorporation strategy, effectively play the institutional status of pension fund shareholders and explore the new fields’ investment opportunities. Meanwhile, government and related research institutions should also support the SRI.The sixth chapter is based on the current SRI market condition of our country and the experience of international pension funds SRI strategies. This chapter puts forward the feasibility suggestions for our country’s pension fund SRI from four aspects, namely screening strategy, ESG integration strategy, shareholder engagement strategy and the new field investment strategy.Based on the slow development obstacles of our pension fund SRI, the seventh chapter puts forward the optimized external mechanism construction.The successful implement of pension fund SRI in our country also need to cultivate the SRI consciousness and promote the capacity of pension fund interest related subjects, target enterprises,government and the third party institutions.The innovations of this paper are as follows:first, the pension funds social responsible investing strategies are summarized. Based on the international pension funds social responsible investing practice, investment strategies include ESC bending strategy, shareholders participating strategy and impact investing strategy, of which the segmentation strategies are also combed. Second, the applications of social responsible investing strategies of the international pension funds including CalPERS and PGGM are studied by using the case analysis method. Besides, the revelations of Chinese pension funds social responsible investment are raised. What’s more, this paper tries to put forward the Chinese pension funds social responsible investing strategies, including strict selection criteria, optimized ESG integration strategy, strategy that shareholders participate in the management and thematic investment strategy. Besides, based on the practical national conditions, the feasible suggestions of the external conditions’ construction of social responsible investment are proposed.There are some shortcomings in this paper. Based on the theoretical exploration studies with a small amount of data analysis, this paper needs further empirical data. Meanwhile, because of the complexity of pension fund SRI and the incomplete understanding of capital market, the proposed investment strategies may not be detailed enough, and the practicality is need to be improved. In my follow-up study, the optimization research of the pension fund SRI strategy are need to be explored and replenished.