Principles for Responsible Investment
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PRI: SGM Report 2017
Martin Skancke and Fiona Reynolds discuss the year’s highlights and priorities for 2018.
The PRI's signatory base is large and diverse and the PRI needs to make sure that everything it does remains relevant to its signatories. That's according to PRI Chair Martin Skancke, who was addressing over 950 signatories during the SGM at the Intercontinental in Berlin at the annual PRI in Person conference.
“We will only undertake work where we see significant signatory value and where we can bring something unique to the table,” he said.
Mr Skancke explained how the beginning of the current three-year strategy was focused on reform – accountability reform, new articles, new governance mechanisms – whereas the latter part focused on developing the Blueprint for responsible investment, the PRI’s vision for the next decade.
The PRI now has over 1,800 signatories from across the globe: “We need to make sure that the PRI stays relevant to all our signatories. But that means not everything we do can be relevant to everyone. And that’s reflected in our strategy plans and our Blueprint,” Mr Skancke said.
Mr Skancke went through the Blueprint, explaining how it consists of three categories: responsible investors, which is at the core of the PRI’s work; sustainable markets, which recognises that responsible investing is not just about the relationship between investors and investee companies, but the markets in which they operate; and a prosperous world for all, which recognises that what the PRI and its signatories do has real-world impacts.
Work the PRI has undertaken over the last year to support these areas include the Sustainable Financial System project, the Fiduciary Duty in the 21st Century project, and launching a working draft of The SDG investment case.
Mr Skancke went on to discuss priorities for the next three-year strategy: a focus on ESG integration, having a closer relationship with signatories and increasing accountability.
“Bringing the PRI closer to our signatories has to be a priority over the next three years,” he said. He cited bringing in more members of staff to global offices and translating more documents into languages other than English as ways to do this.
Referring to the focus on accountability, Mr Skancke said how the PRI wants to make sure they can improve the accountability of signatories to the Principles and the PRI.
HIGHLIGHTS FROM THE PAST YEAR
PRI Managing Director, Fiona Reynolds, then delivered a management and financial report, highlighting the work of the PRI over the past year, and discussing where the PRI will go over the next decade.
“There’s nothing like turning ten, as we did last year, to make you take stock of where you’ve been, where you are, but more importantly, where you need to get to and where RI needs to go over the next decade,” she said.
To focus the PRI’s work over the next decade, and to clarify what the PRI wants to achieve, she said, the PRI developed the Blueprint. She thanked signatories for their valuable input.
Ms Reynolds then went on to detail highlights of the PRI’s work over the last year, which were grouped according to the 14 objectives of the three-year strategy. Further details about the PRI’s work can be found in the 2017 annual report.
Ms Reynolds drew attention to the PRI’s work on taking ESG integration to the next level. She cited the hugely successful publication, A practical guide to ESG integration for equity investing, which has been downloaded over 20,000 times; she also mentioned the recently-launched collaboration with the CFA Institute, which aims to gauge how deeply ESG factors are considered in mainstream investing.
She also discussed the large number of guidance documents and case studies produced over the year to support signatories to implement the Principles. These guides focused both on more mature asset classes, as well as emerging areas such as hedge funds and credit ratings agencies. Guides released also aimed to support asset owners in their implementation of the Principles.
She then went on to talk about the developments the PRI had made in the policy space – including contributing to 21 policy consultations, launching numerous country-specific Fiduciary Duty in the 21st Century roadmaps, and launching the Sustainable Financial System project, formed to create a framework for creating a sustainable global financial system.
Ms Reynolds discussed the PRI’s new accountability project whereby the PRI will implement minimum requirements for memberships in 2018, alongside ways to highlight leadership and best practice, and urged signatories to respond to the accountability consultation.
“Whilst we aren’t looking to name and shame signatories, and we’re not going to make the information public about those who don’t make the minimum requirements, we are certainly looking to name and fame people as part of our accountability programme.”
“We’re looking to identify leadership globally and across asset classes,” she said.
Linked to accountability, was the launch of the PRI’s Data Portal, which allows asset managers to request access to their investment managers’ transparency and assessment reports.
One of the PRI’s core focus areas – and a key component of the Blueprint – is climate action, which was reported by signatories to be their highest priority ESG issue. Ms Reynolds detailed the numerous activities the PRI had undertaken over the last year to further climate action, such as mobilising business action in support of the Paris Agreement and coordinating letters with the G7 and G20, urging their continued commitment to it; and announcing the alignment of the PRI’s Reporting Framework with the Task Force on Climate-related Financial Disclosures’ recommendations.
She also highlighted the numerous high-profile partners with whom the PRI has worked, including MSCI, OECD, Ceres, CDP, UN Global Compact and UNEP FI.
All this activity, Ms Reynolds explained, was supported by a growing network of PRI staff members around the world – for example, a full-time staff presence was introduced for the first time in Canada and Australia, and US staff members went from one to four.
Ms Reynolds then gave details of the PRI’s financial statements.
She also congratulated signatories on working together on ESG factors, even if they are competitors.
“We can only solve problems when we come together,” she said.
Both Mr Skancke and Ms Reynolds thanked all PRI signatories for their support over the past year.
Mr Skancke then spoke about the PRI Board elections and made signatories aware of board candidates and the timeline for voting.
Signatories can watch the full SGM recording here.