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

Pension plans may either limit their sustainability approach to commercial purposes or adopt governance practices aligned withsustainability principles, thereby strengthening their Corporate Social Identity (CSI). This paper explores the moderating roleof CSI in the relationship between traditional corporate governance mechanisms and pension plans' sustainable investmentchoices. 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 detailedhand-collected information on governance structures and board members' characteristics. The results confirm the main as-sumptions of the Upper Echelons Theory, showing that directors' demographic and cognitive characteristics significantly shapethe sustainability orientation of pension funds. CSI further amplifies these effects by moderating the relationship between gov-ernance attributes and ESG investment choices. The study highlights the role of internal governance mechanisms and organ-isational culture in the sustainable transition of pension funds and extends the application of the Upper Echelons Theory byintroducing CSI as a complementary governance dimension.