CSR Reporting ESG and the Sustainable Development Goals in Danish Pension Funds

Anne Marie Hyldgaard Jakobsen

Student thesis: Master thesis


This master thesis describes the development in the use of standards in CSR-reporting, ESG and in reporting regarding sustainability, hereunder UN’s 17 SDG’s. It is examined what standards there are available to govern CSR reporting, and how these standards differ from each other. Besides it is investigated to what extent and why such standards are used by Danish pensions funds in their reporting. This is explored and analyzed through an review of all Annual Financial Statement Reports and all available CSR Reports for the four years 2016-2019 from the 17 chosen pension funds where the results are put in context with the theories of CSR as a Concept, Stakeholder Theory, Multi-Level Theory, and Legitimacy Theory.
The conclusions are that there is a very large quantity of available standards to govern CSR reporting. The standards differ in more than one way. There are both mandatory and voluntary standards and there are different approaches to the standards. They also differ in if they offer possibilities to report on qualitative or quantitative data or both. Besides there are differences in on what level they are relevant. The use of CSR standards in Danish pension funds in their reporting is extensive. By far most of the examined pension funds use not only one or a few standard but a lot of different standards. Most reporting is found to be on a voluntary basis, and by far most of it is seen to be on qualitative basis. Among the voluntary standards the most used are the UN Global Compact, the SDG’s, but also the Principles of Responsible Investments (PRI). Based on CSR as the Concept Theory it can be concluded that the pension funds adapt to the pension savers requirements that they must live up to financial and legal responsibilities, but also to their expectations of ethical responsibility and even desires for philanthropic responsibility. From the Stakeholder Theory it can be concluded that the pension funds are very attentive that their primary stakeholders are the pension savers. The pension funds are aware of the power of these stakeholders and adapt the supply of responsible investments to their demands. Reporting on responsible investments and standards that deal with this are therefore widely used by the pension funds. Based on the Legitimacy Theory another reason for the pension funds use of many voluntary standards in their CSR reporting is found. Most people save to their pension through a pension fund, making the pension savers highly connected to the pension funds, causing it to be very relevant that the pension funds follow the unspoken social contract not only with the stakeholders, but also with society in general. Using the CSR standards is a way to showcase that they follow the rules of society.
The contribution of this thesis is that it gives an understanding of which regulations and conceptual framework, including Danish legislation and global initiatives, that are used when the pension funds are preparing their CSR reporting. It has laid the foundations for understanding how CSR is reported in the Danish pension funds. Besides it contributes with an empirical presentation of how the area of reporting on CSR, ESG and sustainability has grown within the period studied. If standards are introduced by law, they are complied with by the pension funds, but in addition there are also large-scale reporting concerning a big number of voluntary standards, driven by a large demand from the primary stakeholders in the pension funds, namely the pension savers. Finally, it reveals that there has been a shift in which standards the pension funds use towards The Principles of Responsible Investments and The 17 Sustainable Development Goals. The choice of standards is due to a high degree of competition in the industry, why the pension funds seek to meet the demands of their customers which are the pension savers in the best possible way. The pension savers are asking for more investments in sustainability, making it relevant for the pension funds to move towards standards which shows that the products, the investments, live up to this demand. The use of many different standards makes it hard to compare results, why it should be considered working towards fewer or maybe even one standard. When contemplating such a standard it should be considered if it should be enforced by law or voluntary, taking into consideration that a mandatory rule could take some of the competitive incentive from the initiatives of the pension funds.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2020
Number of pages89
SupervisorsCaroline Aggestam Pontoppidan