PRI makes strides in changing the global attitude to responsible investing
The United Nations-supported PRI has made strides in changing the global attitude to responsible investing.
Originally launched in April 2006, , the United Nations-supported Principles for Responsible Investment (PRI) has become the globally recognized benchmark for standards within responsible investing, challenging investors around the world to incorporate environment, social and governance (ESG) issues in their investment processes.
In 2006, the PRI started with only 63 signatories - today there are 23721. Russell Investments became a signatory in 2009. The number of PRI signatories continues to grow across the globe, with institutions disclosing their approach to responsible investments, policies and procedures. The PRI has also become the advocate for discussion and debate and leading the financial industry through innovation in this evolving and crucial area in our industry.
1Source: UNPRI.org, 2018/19 signatories
The new goal is action
The PRI hosts an annual conference that welcomes signatories and other investment professionals from around the globe to collaborate and learn more about responsible investing in today’s landscape. This year, the PRI conference was held in Paris on the 10th-12th of September. As more than 100 expert speakers from across the investment industry and beyond took to the stage to discuss best practices and debate the impact of emerging global issues, there was one very important message that percolated throughout —the message to act now. We often talk about the need for change and the idea of creating a 2050 goal, but as the presenters made all-too clear, that’s simply not enough anymore. The PRI’s new goal is to act now and to act fast.
The PRI is a community of investment organizations (signatories) that believe in responsible investing and are continuously striving to better their approach and best practices.
Each year, the PRI reviews each signatory’s credentials both on an individual and a peer-relative basis before awarding the company an official PRI rating. This also generates a benchmark for signatories and customers to compare an organization’s adherence to the six principles of the PRI against its peers.
At Russell Investments, we have participated in their process for a number of years. In 2019, we received an A or A+ rating on all assessment modules we participated in.
The following are the six key principles that the PRI have established when assessing signatories for an overall rating. These principles have become globally recognised and have helped shape the framework for better and more consistent responsible investment processes.
- Incorporate ESG issues in investment analysis and decision-making processes
- Actively own and incorporate ESG issues in ownership policies and practices
- Seek appropriate disclosure on ESG issues from the entities invested in
- Promote acceptance and implementation of the principles within the investment industry
- Work together to enhance effectiveness in implementing the principles
- Report on activities and progress toward implementing the principles
The heightened focus on responsible investing makes the role of the PRI more crucial than ever. In 1972, the first Danone chairman and CEO said, "There is only one earth, we only live once." Those words kick-started a vision that lives on today: to bring health to our planet and to generations of people through the PRI and its signatories, taking responsibility now, and in the future.
An ongoing global effort and commitment to the PRI principles is one of the best ways that the influential investment community can not only demonstrate to asset owners its dedication to responsible investing but also influence and encourage peers alike to start taking action now - instead of in the future.
The bottom line
As the PRI continues to drive change and provide the framework, tools and knowledge toward responsible investing, we firmly believe it’s the investment community that needs to take responsibility for the actions of today. Tomorrow is no longer good enough.
Russell Investments has made great strides over the years in incorporating the PRI principles into our processes, including manager research, portfolio management and proxy voting and engagement. In addition, considering and incorporating ESG-specific strategies - such as our proprietary decarbonization strategy and ESG tilting methodology - form an important part of our product development process.
We will continue to focus on the implementation of PRI’s principles in order to best support our clients and society in responsible and sustainable investing.
Any opinion expressed is that of Russell Investments, is not a statement of fact, is subject to change and does not constitute investment advice.