Shaping the future of responsible investment – Munich

Shaping the future of responsible investment – Munich

Becoming a PRI signatory has always been a very public statement of intent – a commitment to pursue responsible investment and implement the six Principles. But some signatories have become increasingly concerned that too many signatories are not moving from intent to action, and are signatories in name only.

The accountability of PRI signatories is an important issue for the PRI’s Blueprint Project, as is potential public differentiation of signatories in terms of the progress they have made in implementing responsible investment.

The topic generated significant debate at the 3 June Munich workshop, alongside discussion around potential alignment with the Sustainable Development Goals, the promotion of a sustainable financial system, and possible reviews to the PRI’s principles.

Certainly, our recent consultation found that the majority of signatories believe the PRI should publicly differentiate between signatories, using reporting and assessment information, with 71% in favour.

Such differentiation, perhaps into ‘bronze’, ‘silver’ and ‘gold’ categories, would add to transparency and, hopefully, encourage improved performance. A smaller majority in the survey – 56% – supported such tiering.

Workshop attendees were broadly supportive of such differentiation, but – as with survey respondents – some had caveats and concerns. Should an independent body assess signatories? Would it be appropriate for the PRI itself to act as judge? Is it fair to judge signatories in different parts of the world against the same criteria?

Attendees were also concerned about the PRI moving too quickly on delisting signatories. A number suggested the PRI should not delist signatories at all, or only those who fail to pay membership fees, or do not report as required under Principle 6.

That sentiment wasn’t shared by survey respondents: fully two-thirds support delisting signatories that do not demonstrate meaningful progress in implementing the principles – although the survey did show some disagreement on defining “meaningful progress”, and there was overwhelming support for giving signatories two years in which to improve.

Without doubt, these are difficult issues. But these are issues the PRI is determined to grapple with. Improving the depth of responsible investment implementation was identified as a key priority for the PRI by consultancy Steward Redqueen, in the 10-year review it carried out for the PRI. How we ensure that signatories are transparent, accountable – and treated fairly – will be central to how the PRI is able to promote responsible investment over the decade to come.