Refreshing the Principles

Refreshing the Principles

The six Principles, drafted back in 2006, have proved enormously successful in mobilising the investment community around responsible investment. The rapid growth in signatories in the years immediately following their launch, and the high degree to which signatories have remained committed to the principles, are a testament to their relevance and applicability.

Signatories commit to “evaluate the effectiveness and improve the content of the Principles over time” when they sign. As the PRI turns 10, now is the time to do just that.

We are not seeking to redraft the Principles that have underpinned the PRI’s phenomenal success to date. But equally we should acknowledge that responsible investment is still a new field, and one that is evolving. We should ask ourselves whether they continue to reflect responsible investment in practice today, and its priorities for tomorrow.

If we were drafting them from scratch today, would we choose the same six Principles?

Drafted prior to the onset of the last financial crisis, they focus almost exclusively on the relationship between investors and investee companies. They do not reflect all of the challenges facing investors today. Systemic risks and market structure issues are increasingly material to asset owners and other long-term investors.

The PRI will be publishing a consultation paper in late-May to take all of these issues forward and involve our signatories and stakeholders in this discussion. We have more than 20 consultation workshops and webinars planned globally to gather feedback, and we’ll be presenting our findings and recommendations in Singapore on 6 September.

All of these will feed into our Blueprint for Responsible Investment.