"The role played by finance in allocating resources has become crucial in modern economies. Responsible Investing, i.e., the integration of non-financial criteria (such as environmental, social, and governance (ESG), negative/positive screening, and active ownership) into the investment process, has gained an important role. Does this apply to pension funds, too? This article compares two public pension reserve funds, one from Finland and one from Sweden, and describes their path towards responsible investments. The article shows that although having taken different paths, responsible investing has been clearly integrated into the investment process of both funds during the last decades. In Finland, the role played by pension fund insiders has been remarkable. In Sweden, legislators have played an active and significant role in the process. The design of the pension system equally plays an important role in the overall process. In Sweden, cooperation is promoted in responsible investments. In Finland, pension system design fosters competition, thereby reducing cooperation in investments. This article adds more information on the scarce comparative research on public pension reserve funds."

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