The Principles for Responsible Investment (PRI) Initiative is a network of international investors working together to implement the Six Principles for Responsible Investment. It is an investor initiative in partnership with UNEP Finance Initiative and U.N. Global Compact.
PRI members promote a more resilient global financial system through implementing these principles, and by undertaking public reporting on their ESG investing activities. The PRI working to advance the integration of environmental, social, and corporate governance factors (ESGs) in investment decisions and to develop the largest global responsible investment reporting initiative. So the purpose of the PRI is to understand the implications of resilience for investors, and support signatories in including ESG factors in their investment decision.
The six principles are:
Principle 1: Incorporate ESG issues into investment analysis and decision-making processes
Principle 2: Be active owners and incorporate ESG issues into the ownership policies and practices
Principle 3: Seek appropriate disclosure on ESG issues by the entities in which they invest
Principle 4: Promote acceptance and implementation of the principles within the investment industry
Principle 5: Work together to enhance the effectiveness of implementing the principles
Principle 6: Report on their activities and progress towards implementing the principles
Twenty institutional investor groups from 12 countries, supported by a team of 70 experts from the investment sector, intergovernmental organizations, and civil society, worked together to establish and operationalize the six aspirational principles.
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When organizations became PRI signatories, not only did they agree to abide by the Six Principles, but also agreed to report mandatory information about their responsible investing activities. Through the U.N.s PRI website, signatories report on their progress in respect of those six principles each year.
The PRI encourages new signatories to produce a year-long report within the first year. In addition to being expected to incorporate some or all of the principles of the PRI, signatories of the PRI are also required to meet a number of additional minimum requirements. Failure to meet these requirements following the initial period of implementation may lead the signatory to be removed from the PRIs list – an event that may have adverse P.R. implications for the ex-signatory. PRI has launched a handbook to assist investors–both asset owners and investment managers–who are implementing ESG integration practices into their investment processes.
The PRIs annual assessments play a significant role in promoting best practices and transparency in the field of ESG investment. Responses to all key questions are made public, helping stakeholders evaluate investors’ ESG activities.
The PRI is independent and encourages investors to employ responsible investing for higher returns and better-managed risks, but it does not work for its own profits. It interacts with global policymakers but is not affiliated with any governments and PRI is not part of but supported by the United Nations.
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