Signatory general meeting (SGM)

Question: What are you doing to ensure the economic sustainability of smaller asset managers. Compliance with PRI and Sustainable Finance Disclosure Regulation (SFDR) is expensive. Asset owners assuming PRI standards are pricing out boutiques from potential mandates. Industry concentration risks are real. It is not just about giving a pass on low AUMs.

Answer: PRI signatories appreciate the importance of responsible investment and commit to the 6 Principles. This includes Principle 6: We will each report on our activities and progress towards implementing the Principles and Principle 4:We will promote acceptance and implementation of the Principles within the investment industry. We appreciate the commitment this represents particularly for smaller asset managers. Maintaining our a ‘big tent’ approach we have addressed the ‘burden of effort’ feedback from signatories in our 2023 Reporting Framework which will be launched in January 2023.

Question: I want to congratulate the team on the consultation sessions about the next steps for the PRI, a very rich conversation, well led. How you will ensure that the Principles, the Mission and the workplan are all clearly aligned at the end of the process without one or more of them looking out of date?

Answer: Our intention is to ensure all aspects of the Principles, Mission and strategy are fit for purpose in a changing world. These in turn are the parameters for our workplans. Ensuring that these statements are fit for purpose will rely on what signatories are telling us about the best way to achieve this outcome. Signatories will be able to see and contribute to the outcome via the online formal consultation survey launching in November 2022, in addition to the contributions they have made in the workshops. To find out more about the ‘PRI in a Changing World’ signatory consultation see the PRI website.

Question: Nearly 40% of investment manager signatories have signed up since the start of 2021, and so have not been subject to any reporting requirements. Has the PRI considered requiring reporting ahead of signatory status confirmation (similar to the UK Stewardship Code) to reduce misuse of the PRI label.

Answer: The PRI’s aim is to bring responsible investors together to assist them in adopting responsible investment principles. To achieve this aim, one of our strategic drivers continues to be our maintaining our position as an inclusive organisation, meaning that we welcome a diverse signatory base. Introducing reporting requirements before the confirmation of signatory status would create a barrier to entry to signatories which, we feel, would detract from wider positive outcomes for our signatories and the entire sector.

We recognise that holding signatories accountable is critical for credibility and drives progress, which is the reason this is another one of our strategic drivers. While we do not require reporting before receiving the signatory status, we have minimum requirements in place after signatories’ report to ensure they are sufficiently progressing on implementing the Principles. We feel this framework maintains signatory accountability and upholds high standards while also ensuring PRI signatory status remains widely accessible. For more information, please see minimum requirements for investor membership.

Question: Are OCIO relationships of small entities not a good fit for the asset owner reporting? Or is there a different way of approaching the reporting for these groups.

Answer: The PRI’s approach means that the investor Reporting Framework aims to capture a variety of investor approaches. Understanding a signatories’ reporting approach starts at sign up, where signatories will have joined as either an asset owner, investment manager or service provider organisation. A signatory’s category determines how they report to PRI.

Question: Will all indicators be fixed and disclosed in January 2023? Signatories need enough time in advance to respond to the indicators.

Answer: Yes, the full investor Reporting Framework, including all modules and indicators, will be available to all signatories in January 2023. We appreciate the need for signatories to prepare for the upcoming reporting cycle. By sharing the framework in January, we allow at least three months for signatories to prepare for the mid-May opening of the reporting cycle. Signatories will be contacted when the 2023 investor Reporting Framework becomes available on the PRI website.

Question: How many sovereign wealth funds are signatories?

Answer: The PRI has 33 sovereign wealth funds or government-controlled funds signatories.