A commitment to responsibility
Support for the UN Principles for Responsible Investment (PRI) is growing rapidly. The PRI creates both challenges and opportunities for investors and many are now looking at how best to implement the principles.
The PRI offers both asset owners and asset managers the opportunity to make a public top level commitment to responsible behaviour as investors, and over 300 have already done so. It provides practical means of collaboration and undertakes studies and projects to move the field forward.
Of the six principles investors commit to, three key ones are:
- seeking better ESG disclosure from Companies
- engaging with companies to improve ESG performance
- integrating ESG factors into investment analysis.
Opportunities
For asset owners, the PRI offers opportunities to collaborate with others who see long term value in investors taking these steps. It also offers a marketplace of asset managers committed to addressing the same agenda.
For asset managers, the PRI offers is a means to demonstrate a serious intent to meet growing expectations in this area, and a chance to work with and learn from others in improving their own approaches.
EIRIS’ UN PRI Toolkit is specifically designed to help asset owners and asset managers implement their commitments to the Principles for Responsible Investment.
Challenges
Each signatory faces the challenge of moving from commitment to practical action. Each must report progress annually against the principles.
But the signatories together face the challenge of improving corporate performance on the four UN Global Compact issues (Environment, Human Rights, Labours Standards and Bribery) in ways that benefit investors and the wider world.
The EIRIS study The state of responsible business: Implications for PRI signatories identifies models of good practice on all issues and in all regions. But it also finds that there are large numbers of ESG non-disclosers (even amongst high impact companies) and significant deficits in corporate policies and management systems. So there is much to be done.
The PRI is still in its infancy, with many investors understandably adopting a wait and see approach, even as others sign up. However we believe that the global reach of the Principles and their success in attracting high level support makes PRI one of the most exciting developments in our 25 year history
