The UNEP Finance Initiative (UNEP FI) and the UN-supported Principles for Responsible Investment (PRI) have announced a joint initiative that will innovate in areas not yet ready for investment so that they can be adopted within mainstream investing.
With the Investment Leadership Programme (ILP), the sister organisations aim to transform the responsible investment industry by bringing together groups of investors to revolutionise areas of responsible investment and influence financial system function so they can be included in mainstream investment choices.
For example, looking into biodiversity metrics can be extremely complex – climate is complicated enough with only one KPI (CO2), whereas biodiversity covers water, soil, flora, fauna and beyond. The sister organisations also pointed to sustainable commodities i.e. working along a whole value chain – which requires the collaboration not only of investors but also banks and insurers.
“This new programme is our response to the urgent need for stronger, collaborative and accelerated action on sustainable development” said Eric Usher, UNEP FI head. “We are taking our close relationship with PRI a step further and together providing the platform for leading responsible investors to move faster than the mainstream on delivering the UN Sustainable Development Goals (SDGs) and the Paris Climate Agreement.”
Additionally, the ILP will aim to connect investors to policy makers and therefore inform policy change on key ‘reform areas’ over a three-year period. This, the UNEP FI and PRI said, will bring together recognised leaders in the investment space with key policymakers to enable action across a range of sustainability issues. The Legal Framework for Impact and the Net-Zero Asset Owner Alliance are the first two initiatives that will be part of the ILP.
“Leading investors can better effect change if they speak to policymakers and their investee companies with one powerful voice, “said PRI’s CEO, Fiona Reynolds (pictured). “The ILP will enable a collaborative, ambitious style of engagement from responsible investors and, by developing guidance and thought leadership on policy and regulatory change, it will inform investor action to help realise a truly sustainable global economy.”
The ILP builds on a 15-year relationship between the UNEP FI and PRI which included a collaboration on the Fiduciary Duty in the 21st Century, clarifying the legal responsibility investors have to include ESG matters in their decision-making, and the Net-Zero Asset Owner Alliance, that was co-launched in 2019. The group sparked the development of other net-zero alliances, demonstrating how investor leadership can catalyse action across the financial industry including the Net-Zero Asset Managers Initiative , the UN-convened Net-Zero Banking Alliance and UN-convened Net-Zero Insurance Alliance.
