Investors can contribute to economic development and entrepreneurial activity by investing in inclusive finance. These investments can also carry potential financial and reputational risks. To mitigate such risks, a group of institutional investors launched the Principles for Investors in Inclusive Finance (PIIF) in 2011. The PIIF are housed within the UN-supported Principles for Responsible Investment (PRI) Initiative. As of 2014, 49 investors worldwide have signed the PIIF, including APG, TIAA CREF and FMO, with a combined AUM of approximately US$ 9bn invested in inclusive finance.
This report summarises data submitted by 52 investors on their implementation of the Principles for Investors in Inclusive Finance (PIIF).
In signing the Principles, investors commit to:
- Expanding the range of financial services available to low-income people;
- Integrating client protection into all their policies and practices;
- Treating their investees fairly, with clear and balanced contracts, and dispute resolution procedures;
- Integrating ESG factors into their policies and reporting;
- Promoting transparency in all their operations;
- Pursuing balanced long-term returns that reflect the interests of clients, retail providers and end investors; and
- Working together to develop common investor standards on inclusive finance.
Benefits of signing PIIF
The PIIF provide investors with a unique responsible investment framework, developed for investors, by investors. They address key issues that stakeholders have collectively identified, ranging from the risks associated with client over-indebtedness to the need for further transparency in inclusive finance.
The Principles provide practical guidance on responsible investment practices. In addition, signatories can access case studies and supplementary guidance via the signatory-only extranet.
CONNECT AND COLLABORATE WITH GLOBAL INVESTORS
Through the PIIF and PRI, signatories can connect and collaborate with fellow institutional investors around the world, via:
- online discussions on topical issues, and
- project-specific working groups
PARTICIPATE IN OUR REPORTING FRAMEWORK
A reporting framework and accompanying assessment offers public accountability and enables investors to benchmark their practices against that of peers. The aggregate data from this reporting process results in a unique source of information on responsible investment practices in this field.
STAY ON TOP OF INDUSTRY TRENDS
PIIF signatories can stay on top of the latest industry developments, research and resources via a dedicated website and regular communications.
STRENGTHEN OTHER INDUSTRY EFFORTS
The PIIF link to industry initiatives focused on improving industry practice among retail providers, including the Smart Campaign, Social Performance Task Force and MFTransparency. By signing PIIF, signatories send a strong signal to the market of their commitment to responsible practices.
How to join
Current PRI signatories can sign the PIIF at no additional cost. Contact Kurt Morriesen.
Non PRI signatories are required to sign the Principles for Responsible Investment, for which there is an annual fee based on assets under management. After an optional one year grace period, all asset owner and investment manager signatories are asked to complete the PRI Reporting Framework annually. See www.unpri.org/signatories/become-a-signatory/.
The PIIF were established in January 2011 on the initiative of investors and Her Royal Highness Princess Máxima of the Netherlands in her role as UN Secretary-General’s Special Advocate for Inclusive Finance for Development. The group developed the PIIF together with the PRI Initiative, the Consultative Group to Assist the Poor (CGAP) and key industry players, and launched with the support of the Dutch Ministry of Foreign Affairs.
The launch of the Principles for Investors in Inclusive Finance.