GERMANY - Socially responsible investment (SRI) is on the rise in most German municipal funds and professional pension funds (Versorgungswerke), but it has failed to take off with federal and state funds, according to a study by SD-M and Allianz Global Investors.

In a paper on the preliminary results of the survey - covering 150 pension organisations with more than €200bn in combined assets under managements - Axel Hesse, senior consultant at SD-M, found that roughly 60% of pension funds managing money for either certain professions (berufsständische Versorgungswerke) or for municipalities and churches in various provinces are already applying SRI criteria to their investment decisions.

But Germany's federal and provincial governments will need to start "living up to their position as role models" when it comes to sustainable investment, he said.

More than one-third of Versorgungswerke and municipal and church funds plan to increase the adoption of SRI criteria over the next two years, Hesse said.

He added that none of the funds already using SRI is planning to drop the approach.

The percentage of assets invested under SRI criteria was 7.1% for municipal and church funds and 2.8% for Versorgungswerke.

By 2015, these figures should increase to 10.4% and 5.5%, respectively, Hesse predicted.

Among Versorgungswerke, the Bayerische Versorgungskammer, which signed the UNPRI earlier this year, has been one of the main drivers of the adoption of SRI principles.