The Principles for Responsible Investment
As institutional investors, we have a duty to act in the best long-term
interests of our beneficiaries. In this fiduciary role, we believe that
environmental, social, and corporate governance (ESG) issues can affect
the performance of investment portfolios (to varying degrees across
companies, sectors, regions, asset classes and through time). We also
recognise that applying these Principles may better align investors
with broader objectives of society. Therefore, where consistent with
our fiduciary responsibilities, we commit to the following:
1 We will incorporate ESG issues into investment
analysis and decision-making processes.
Possible actions:
- Address ESG issues in investment policy statements
- Support development of ESG-related tools, metrics, and analyses
- Assess the capabilities of internal investment managers to incorporate
ESG issues
- Assess the capabilities of external investment managers to incorporate
ESG issues
- Ask investment service providers (such as financial analysts, consultants,
brokers, research firms, or rating companies) to integrate ESG factors
into evolving research and analysis
- Encourage academic and other research on this theme
- Advocate ESG training for investment professionals
2 We will be active owners and incorporate ESG issues
into our ownership policies and practices.
Possible actions:
- Develop and disclose an active ownership policy consistent with
the Principles
- Exercise voting rights or monitor compliance with voting policy
(if outsourced)
- Develop an engagement capability (either directly or through outsourcing)
- Participate in the development of policy, regulation, and standard
setting (such as promoting and protecting shareholder rights)
- File shareholder resolutions consistent with long-term ESG considerations
- Engage with companies on ESG issues
- Participate in collaborative engagement initiatives
- Ask investment managers to undertake and report on ESG-related engagement
3 We will seek appropriate disclosure on ESG issues
by the entities in which we invest.
Possible actions:
- Ask for standardised reporting on ESG issues (using tools such as
the Global Reporting Initiative)
- Ask for ESG issues to be integrated within annual financial reports
- Ask for information from companies regarding adoption of/adherence
to relevant norms, standards, codes of conduct or international initiatives
(such as the UN Global Compact)
- Support shareholder initiatives and resolutions promoting ESG disclosure
4 We will promote acceptance and implementation of
the Principles within the investment industry.
Possible actions:
- Include Principles-related requirements in requests for proposals
(RFPs)
- Align investment mandates, monitoring procedures, performance indicators
and incentive structures accordingly (for example, ensure investment
management processes reflect long-term time horizons when appropriate)
- Communicate ESG expectations to investment service providers
- Revisit relationships with service providers that fail to meet ESG
expectations
- Support the development of tools for benchmarking ESG integration
- Support regulatory or policy developments that enable implementation
of the Principles
5 We will work together to enhance our effectiveness
in implementing the Principles.
Possible actions:
- Support/participate in networks and information platforms to share
tools, pool resources, and make use of investor reporting as a source
of learning
- Collectively address relevant emerging issues
- Develop or support appropriate collaborative initiatives
6 We will each report on our activities and progress
towards implementing the Principles.
Possible actions:
- Disclose how ESG issues are integrated within investment practices
- Disclose active ownership activities (voting, engagement, and/or
policy dialogue)
- Disclose what is required from service providers in relation to
the Principles
- Communicate with beneficiaries about ESG issues and the Principles
- Report on progress and/or achievements relating to the Principles
using a 'Comply or Explain'1 approach
- Seek to determine the impact of the Principles
- Make use of reporting to raise awareness among a broader group of
stakeholders
The Principles for Responsible Investment were developed by an international
group of institutional investors reflecting the increasing relevance
of environmental, social and corporate governance issues to investment
practices. The process was convened by the United Nations Secretary-General.
In signing the Principles, we as investors publicly commit to adopt
and implement them, where consistent with our fiduciary responsibilities.
We also commit to evaluate the effectiveness and improve the content
of the Principles over time. We believe this will improve our ability
to meet commitments to beneficiaries as well as better align our investment
activities with the broader interests of society.
We encourage other investors to adopt the Principles.
