“Launched in 2006, the Principles for Responsible Investment (PRI) is an investor initiative, which supports the adoption and the implementation of six Principles articulated around environmental,social and governance (ESG) issues. They notably promote the integration of ESG into investment analysis, decision-making processes, ownership policies and practices, and disclosure – working principally with the institutional investor and asset management community. They also seek to enhance the acceptance of ESG issues in the investment industry as well as knowledge sharing among the signatories of the Principles.”
The Principles for Responsible Investment are a voluntary and aspirational, offering a menu of possible actions for incorporating ESG issues into investment practice:
Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
Principle 6: We will each report on our activities and progress towards implementing the Principles.
The six core principles are accompanied by 35 possible actions (see:https://www.unpri.org/pri/what-are-the-principles-for-responsible-investment).
UNPRI, as the name suggests, is an initiative of one part of the UN and has two main partners UNEP FI and the UN Global Compact. As such the PRI can be seen as one shot in the blast of measures emanating from the UN and a host of other bodies aimed at generating support and momentum for ESG related actions. The distinctiveness of PRI is to be found in its target(institutional investors and asset managers) and the extent of its guidance and assessment (see: https://www.unpri.org/download?ac=4315 and https://www.unpri.org/download?ac=1451). Overall, it feels a bit heavy and onerous for a voluntary initiative designed to be helpful.