The Principle for Responsible Investment (PRI) has revealed three strategic drivers it will be concentrating on over the next three years to support the evolution of the industry: accountability, scalability and ‘big tent’.
The body announced its strategy for 2021-24 with the theme ‘building a bridge between financial risk and real-world outcomes’, which will also be closely aligned to the six principles for Responsible Investment and the PRI mission.
The strategic drivers are defined as followed:
A statement from the PRI said: “The 2021-24 strategy begins at a moment marked by multiple, interrelated crises: the Covid-19 pandemic, environmental challenges and deepening social inequalities. Despite the economic disruption, responsible investment has entered the mainstream, and investors’ work with ESG issues has grown ever more sophisticated. But there is still much to be done.
“The PRI Principles and Mission are more relevant – and more necessary – than ever before. Under the framework of our 10-year Blueprint for Responsible Investment, the PRI’s new three-year strategic plan sets out an ambitious response to these circumstances, building on the unique role of the PRI and our signatory base, and on our distinctive strengths as the world’s largest responsible investment organisation.”
The PRI started in 2006 with a small group of signatories but membership has now grown to nearly 4,000 global signatories representing more than half of the world’s institutionally managed funds.
A blog written by Martin Skancke, chair and Fiona Reynolds (pictured), CEO of the PRI, said: “Over the past year, we’ve worked closely with our signatories to develop our new strategy ensuring that as an organisation of, by and for signatories that it is first and foremostly underpinned by the perspective of the investor in the market economy. It draws on the distinctive strengths of the PRI to respond to the external environment we operate in and determine where we are best placed to deploy our efforts.”
Big tent
The PRI said the new strategy will maintain its inclusive approach and will “encourage all investors to become responsible investors is critical to achieving momentum”. However, Skancke and Reynolds added there is no one-size-fits-all approach with some resources and programmes not applicable to all signatories, but the aim is to “provide value for everyone and to drive forward responsible investment as a whole”.
See also: – Q&A with PRI CEO Fiona Reynolds
Accountability
Increasing accountability of the signatory base will be key to tackling the risks of greenwashing, they also said, and critical for signatory credibility and progress.
“We will continue to move the needle on what it means to be a signatory, celebrating leadership and raising the bar both at the bottom and the top. We will strengthen our minimum requirements and complete the reform of the Reporting and Assessment Framework, aiming to improve practice over time.”
This year, the PRI is piloting a new Reporting Framework and encouraging signatory feedback, which will be reviewed by the board, who will formally report back to signatories on the outcomes of the pilot review before the 2022 reporting period.
Scalability
The PRI is also focused on scaling signatories’ responsible investment effort and impact, as well as education and collaboration between members with Reynolds and Skanchke noting the current environment as “the best opportunity for global co-operation we’ve seen in some time”.
“To help signatories navigate the next three years, we will prioritise two areas within our ESG incorporation work,” their blog said. “Firstly, climate mitigation, as the most urgent existential challenge facing society, including focus on net-zero as well as biodiversity. And secondly, human rights, as both an immediate source of protection for individuals from harm and discrimination and as a necessary foundation for lasting social equality, stability and productivity.
“We’re also experiencing significant tailwinds with sustainability high on the agenda in several important markets, providing the best opportunity for global co-operation we’ve seen in some time as well as an increasing role for responsible investment in global financial regulation.
“As such, our policy programme will play an important role in the new strategy, contributing to the inclusion of sustainability factors being imbedded in financial policy and regulation around the world. We’ll also leverage this opportunity to increase harmonisation, supporting the development of standardised and comparable sustainability reporting for investors and corporations.”
The PRI will consult with signatories on these developments and any possible changes to its framework will be put to a s signatory vote in 2022.
“Our ultimate aim is to enable a sustainable global financial system and delivering this three-year strategy will be a major steppingstone to achieving our mission. It is an ambitious vision – and one we are well placed to achieve together,” the chair and CEO concluded.
