To help mark its 10-year anniversary, the PRI commissioned Dutch consultancy firm Steward Redqueen (www.stewardredqueen.com) to carry out an independent evaluation of its impact over its first decade making responsible investment mainstream.
A summary of their findings
Guided by six principles, the PRI is the leading global platform bringing together global investors to demonstrate their commitment to responsible investment (RI). Through a combination of engagement, sharing of best practices and learning, the PRI supports signatories in understanding the implications of sustainability for investors and moving towards incorporating environmental, social and governance (ESG) factors within their investment processes. A decade after its establishment, the PRI is today widely recognised for its leadership role in creating global awareness about RI and helping progress RI within the core processes of investors around the world. This alone is a remarkable achievement.
At the same time, we are forced to conclude that RI has not yet been mainstreamed. Despite increased awareness, implementation still lacks depth. This said, mainstreaming RI involves a system change — a paradigm shift that, amongst other things, will require a corresponding culture change within the world of institutional investors. And this is no easy task: at a fundamental level, it is proving difficult to change or redirect the financial sector. Even following the global financial crisis it would appear that, rather than change, the failing system has, in broad terms, merely been repaired.
Genuine ESG integration will require additional efforts. In this report we conclude that the PRI with its mission to contribute to achieving a sustainable global financial system, is uniquely positioned to play an important role in this. The size and diversity of its signatory base, its global outreach, its brand and its thought leadership are all invaluable assets. By working with its signatories to progress their investment practices and by influencing the ‘enabling environment’, the PRI can help align the huge potential of the investment industry with global societal needs.
However, to be successful over the next few years the PRI will have to step up its efforts. At the time of its inception, the Principles were seen as ‘aspirational’. In view of the global challenges we face 10 years on, and their impact on societies and the investment world, we would argue that putting the Principles into practice is no longer something to aspire to, but now the only ‘rational’ choice facing investors. Increasingly the focus of the PRI and its signatories should be on moving from principles to practice.
Ultimately, the success of the PRI will not be measured by its ability to engage the investor world in dialogue about change, but by its ability to influence their investment practices. And the impact this has on the lives of current and future generations, and indeed on the planet itself.
Steward Redqueen B.V.
Haarlem, The Netherlands, April 2016