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Sep 13, 2015

UN-backed PRI to target member accountability

PRI signatories may also face pressure to increase transparency of ESG assessments

The UN-backed Principles for Responsible Investment (PRI) will work in the next year toward ensuring its 1,400 signatories are more accountable to the organization and its principles, and will soon outline options to increase transparency of its assessment of signatories, which are currently made public only if the signatories themselves publish them, according to a statement from PRI chairman Martin Skancke.

Skancke says the organization also plans to revisit the six basic principles that constitute the PRI’s vision and mission. He notes that the principles were drafted before the financial crisis of 2008 and focus on the relationship between companies and investors, and ‘we know that responsible investment is about much more than this.’

He made the speech at a meeting of more than 500 signatories in London to mark the 10th anniversary of the PRI, and to outline changes under consideration for 2016.

‘These are important systemic issues that lie beyond the relationship between companies and investors and we need to establish whether appetite exists among our signatory base to update the principles ‒ for example, by adding a seventh principle on systemic risk ‒ to reflect the increased importance of these issues for investors and the PRI,’ Skancke said.

The six principles currently cover incorporation of ESG principles in decisions, being active asset owners, pressing for ESG-related disclosure, promoting the principles in the investment industry and working together to make the principles more effective. As a sixth principle, signatories are to report on their progress toward implementing the principles.

Earlier that day, the UN’s Sustainable Stock Exchanges initiative released its Model guidance on reporting ESG information to investors, which is meant to provide a voluntary model for stock exchanges to use to develop their own guidance. Seven exchanges, including the London Stock Exchange Group, the Bucharest Stock Exchange, the Egyptian Exchange, the HoChiMinh Stock Exchange and others have so far committed to working with the guide, PRI says in a press release.