Responsible investment practitioners know from direct experience that short-termism, misaligned incentives in the investment chain, environmental and social externalities, instability in the financial market as a whole and a range of other factors can impede their efforts to integrate ESG issues into investment decisions and to make capital markets more sustainable overall.
Some of these are addressed by the PRI Initiative’s existing work. Many are not. The Initiative’s new strategy – agreed by the Advisory Council in March 2012 – therefore gives high priority to new work to help address ‘top-down’ factors of this kind.
The consultation paper provides an overview of existing research and knowledge in several areas that have been identified as relevant in this context as a result of the PRI’s experience in its first six years, and that of signatories more broadly. It then seeks signatories’ views on seven proposed project areas designed to address some of these challenges. There is also an opportunity to highlight other issues – for example, strategic barriers or challenges to a sustainable financial system in your particular market.
This new action-oriented work stream will bring together groups of signatories to develop practical ways for investors to change their own practices in order to address these challenges, and proposals for any necessary changes to public policy. Signatory and industry feedback will be important in shaping this new work stream over the coming year: the PRI has launched a survey and would particularly value input from CIOs/CEOs and those with responsibility for strategy and asset allocation. When you have read the consultation paper, please send us your comments and proposals via the online survey. If you do not have access to the PRI extranet access, please email firstname.lastname@example.org for access to the survey.
The deadline for responses has been extended to 19 April 2013.
The PRI hosted two webinars during February to discuss these issues and proposed projects in more detail and to answer questions from signatories.