If it wants to up its game in improving retirement outcomes, the global pension industry has to take on some significant challenges.

That’s according to a new report from State Street Corporation, “Pensions with Purpose: Meeting the Retirement Challenge,” which looked at the ways retirement funds are tackling those challenges.

Read: January bad for pension funded status

Based on the findings in the report, coming out of a survey of 400 pension fund professionals from 20 countries, five areas emerged in which pension professionals are responding to such market forces as sustained volatility, low interest rates, shifts in demographics, and funding pressures.

1. Governance

Ninety-two percent of respondents indicated that they would be upgrading at least one aspect of governance this year to better fulfill their objectives, with 50 percent planning on adjusting the balance of responsibilities between the board and management.Forty-five percent will increase board members’ training and education opportunities, while 44 percent will change the recruiting process for board members and 42 percent will revise incentive models. Forty-one percent will increase transparency to board members about governance and investment performance.

2. Alternative investments and ESGs

Alternative investments and environmental, social and governance (ESG) factors are emerging as possible ways to meet changing retirement needs:

• 51 percent are looking at funds of hedge funds

• 50 percent at real estate

• 46 percent at private equity

• 41 percent at infrastructure

• 36 percent at direct loans

• 35 percent at single-manager hedge funds

ESG strategies are of “high” interest to 26 percent of respondents, and of “moderate” interest to 57 percent.

3. Increase risk

Under pressure to produce better investment returns, 36 percent of respondents indicated that they were prepared to increase risk to gain better returns. However, 45 percent are looking for ways to cut risk within their portfolios; adoption of alternative investments will compel them to improve risk management across those asset classes.

4. Pooling assets

Some respondents are pooling assets or consolidating operations to save cost, improve visibility on risk, and enhance overall performance, with 35 percent indicating that they plan to pool assets and liabilities within the next three years.

5. Adding to internal teams

And many are moving in the opposite direction to the outsourcing trend, adding to internal risk and investment teams and bringing additional aspects of their investment management in house. While they’ll still be looking for external advisors, they’ll be looking for new ways in which those advisors can add value—and they’ll be more discriminating in their use of consultants and asset managers.