Governance for Pension Plans' Sustainable Transition: The Moderating Role of Corporate Social Identity

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Abstract
Pension plans may either limit their sustainability approach to commercial purposes or adopt governance practices aligned with sustainability principles, thereby strengthening their Corporate Social Identity (CSI). This paper explores the moderating role of CSI in the relationship between traditional corporate governance mechanisms and pension plans' sustainable investment choices. The study covers a representative sample of Italian pension funds, social welfare funds, and individual pension plans. It employs proprietary survey data collected through ad‐hoc questionnaires for the period 2021–2023, combined with detailed hand‐collected information on governance structures and board members' characteristics. The results confirm the main assumptions of the Upper Echelons Theory, showing that directors' demographic and cognitive characteristics significantly shape the sustainability orientation of pension funds. CSI further amplifies these effects by moderating the relationship between governance attributes and ESG investment choices. The study highlights the role of internal governance mechanisms and organisational culture in the sustainable transition of pension funds and extends the application of the Upper Echelons Theory by introducing CSI as a complementary governance dimension.

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