A postcard from PRI in Person Berlin
I had the fortune to recently attend the Principles of Responsible Investment's (PRI) annual conference 'PRI in Person' held this year in Berlin. I would congratulate the PRI for turning on another great event– great company, fantastic content, and inspiring global collaboration to continue to drive continual improvement. Delegates were certainly spoilt with access to the Arminiusmarkthalle and the U3 Bahnhof and Tunnel for dinner underneath the Berlin Wall.
I wanted to share a few key highlights from the program and the priority areas that the PRI have highlighted in their blueprint for the coming years:
- Responsible Investors
- Empower asset owners
- Support investors incorporating ESG issues
- Foster a community of active owners
- Showcase leadership and increase accountability
- Convene and educate responsible investors
- Sustainable Markets
- Challenge barriers to a sustainable financial system
- Drive meaningful data throughout markets
- A prosperous world for all
- Champion climate action
- Enable real-world impact aligned with SDGs
There were so many topic highlights I don't know where to start! Climate change continues to be the highest priority ESG issue. Former UN climate chief, Christiana Figueres gave a sobering key note address on the state of the world and challenged the global network to commit 1%+ of total assets to low carbon investments in a bid to achieve the Paris Agreement targets.
As always, there was focus on forward looking themes and where to next. Climate change will continue to be a top three issue for investors and asset owners globally, and emerging themes discussed at the conference included sugar (labelled as the next tobacco), deforestation (from palm oil to soy, cattle and coffee), blockchain, cyber security, and the impact of fake news and of the opportunity to harness social media.
There was also an increased focus on social issues with a number of great sessions highlighting inequality and human rights. I was shocked to learn that there is an estimated 21 million people suffering from modern day slavery! Sessions discussed the linkages between equality and economic growth. ESG issues are often labelled as "non-financial", so research highlighting the relationship between equality and economic growth clearly demonstrates the financial risk to investors that inequality and breach of human rights can incur.
A popular topic amongst delegates was Sustainable financial systems. Investors, asset owners and governments are all grappling with the complexity of financial systems globally and regulation that may support systems that are fit for purpose into the future. The recommendations from the Financial Stability Board's Taskforce on Climate-related Financial Disclosures was an area of focus at the conference with wide spread support for the recommendations to create a single framework for disclosure on assessment and management of climate-related risk and a realistic timeframe for implementation (proposed as five years).
The United Nations' Sustainable Development Goals (SDGs) were a key platform for discussion. A number of European pension funds presented on their collaborative efforts to design a reporting framework. The SDG investment case, a recent report issued by the PRI, highlights compelling reasons why investors should engage with the SDGs and move responsible investment from process and business conduct to real-world impact. The PRI identified the SDGs as a critical to investors' fiduciary duty with potential for significant financial impact. The report is available on the PRI website and is an interesting read.
Collaboration was another consistent theme across many of the sessions, with the final plenary on shareholder engagement declaring that collaboration is critical to success. This was a good segue for Climate Action 100+ to close the conference with a call to action, which set the scene for a global effort to work collaboratively with the world's largest emitters and encourage them to act on climate change.
Having had the opportunity to discuss some of the key topics shaping the agenda in 2018 I am excited for the road ahead and will watch with interest the changes in global politics, climate science, collaboration, regulation, and corporate commitment to achieving the UN sustainable development goals. Next years' PRI in Person in San Francisco is already shaping up to be full of a number of new achievements.