The Investment Practices team produce guides, case studies, webinars and events to inform investors how to implement the Principles into their investment practices, in a systematic way, within each asset class.
The team is working closely on several fronts to provide responsible investment guidance and implementation support to asset owners.
Investment strategies - developing practical guidance for asset owners to outline how robust fact-based investment strategies are developed and formulated.
Manager selection, appointment & monitoring - working closely with the Reporting and Assessment team to develop a tool that will provide asset owners with data from the Reporting Framework on investment managers’ responsible investment performance.
Investment policy - developing with signatories practical guidance on how to review existing investment policies to include ESG considerations.
Crafting an investment strategy – a process guidance for asset owners supports asset owners, including their board of trustees and executives, in developing and formulating their investment strategy, and outlines how ESG issues can be incorporated across six steps:
1. Assessment of the investment context
2. Development of mission and vision
3. Development of investment principles (including investment beliefs)
4. Investment strategy selection
Investment Policy: Process & Practice – A Guide for Asset Owners provides a concise and implementable framework to support asset owners in revising their investment policy in order to incorporate long-term factors in their investment chains. The guidance covers the following aspects:
- Reviewing an existing investment strategy
- Aligning stakeholders
- Reviewing relevant legislation
- Reviewing ESG investment guidance, terminology and debate
- Undertaking a peer review.
Also, it outlines the most common investment policy sections, including ways to incorporate ESG considerations:
- Purpose & scope
- Investment objectives
- ESG incorporation approaches
- Active ownership & engagement
Aligning expectations – Guidance for asset owners guides signatories on incorporating ESG-factors into manager selection, appointment and monitoring was launched in February 2013.
- setting expectations on managing ESG factors in a portfolio/fund;
- including ESG-related expectations in RFPs, questionnaires and discussions;
- approaches for evaluating potential and appointed managers.
How asset owners can drive responsible investment – Beliefs, strategies & mandates was published by the Policy team in March 2016. It outlines the key role asset owners play in getting ESG considerations incorporated throughout the investment chain.
Writing a responsible investment policy - Guidance for asset owners, launched in September 2013, discusses responsible investment policy questions.
A practical guide to ESG integration for equity investing
To guide investors – both asset owners and investment managers – who are implementing ESG integration techniques in their investment process, A practical guide to ESG integration for equity investing is the most comprehensive description to date of what ESG-integrated analysis is, and how it works in practice.
The guide contains information and case studies on integration techniques that apply to investment strategies including fundamental, quantitative, smart beta and passive investment. It assists asset owners and investment managers with constructing ESG-integrated investment processes and helps asset owners to assess their managers’ integration practices.
A chapter on sell-side investment research maps out the types of ESG-integrated sell-side research available, and demonstrates sell-side brokers’ integration techniques.
Integrated Analysis (2013)
The 2013 guide Integrated Analysis provides 21 case studies on integration techniques used by fundamental managers and sell-side brokers.
Alongside an array of case studies and webinars on a range of topics relating to ESG and corporate, sovereign and other forms of debt, the PRI's major fixed income project for 2016/17 is to engage credit rating agencies to promote more systematic and transparent incorporation of ESG into credit ratings and analysis. For more details, contact FI@unpri.org.
- Statement on ESG in Credit Ratings (2016) - also available in Chinese (Investor Statement, 2016)
- ESG Analysis for Energy and Utilities Credit Analysts (Webinar, 2017)
- Climate Strategies for Fixed Income Investors (Webinar, 2017)
- ESG in Sovereigns (Webinar, 2016)
- ESG in Financials (Webinar, 2016)
- ESG and Credit Ratings (Webinar, 2016)
- Fixed Income (Investor Guide, 2014) - also available in Chinese, Korean and German
- Sovereign bonds: Spotlight on ESG risks (Investor Briefing, 2013) - also available in German
- Corporate bonds: Spotlight on ESG risks (Investor Briefing, 2013) - also available in German
Fixed Income Case Study Series
Written by fixed income practitioners from around the world, the PRI’s Fixed Income Case Study series highlights examples of interesting and innovative approaches to integrating ESG, negative and positive screening, thematic investment and engagement across the asset class. Sharing these examples enables investors to collectively build a concept of emerging good practice. If you would like to learn more or contribute your own case study please review this brief.
Green Bonds: Measuring Impact
ESG in UK Social Housing Investment
Corruption as an Indicator of Creditworthiness
Integrating ESG Factors in Partnership with an NGO
WWF & ALLIANZ AUSTRIA
Resilience to Climate Change in the UK Water Sector
ROYAL LONDON ASSET MANAGEMENT
Education and European Government Bonds
BNP PARIBAS INVESTMENT PARTNERS
Providing Assurance for Investors Considering Credit Investments with a Social Impact
ATLANTIC ASSET MANAGEMENT
Quantifying the Impact of More Strictly Enforced Environmental Regulation
ITAÚ ASSET MANAGEMENT
Engaging with Issuers
Using the Extractive Industries Transparency Initiative to Enhance Credit Ratings Assessments
PRI signatories that are limited partners (LPs) are required to report on their ESG incorporation practices for the three stages of selecting, appointing and monitoring their investment managers. The PRI is building tools to support these practices and create industry-consistent approaches.
Following the launch of the LP responsible investment due diligence questionnaire in November 2015, covering ESG considerations in manager selection, the PRI is working with signatories to develop an appointment tool: guidance for LPs on how to incorporate responsible investment considerations into limited partnership agreements and/or side letters.
PRI signatories that are limited partners (LPs) are required to report on their ESG incorporation practices for the three stages of selecting, appointing and monitoring their investment managers. The PRI is building three standalone tools to support these practices and create industry-consistent approaches.
Following the launch of the LP responsible investment due diligence questionnaire in November 2015, covering ESG considerations in manager selection, the PRI is in the process of finalising and publishing an advisory document for LPs on how to articulate and refine ESG provisions in fund terms in partnership with an appointed PRI signatory working group.
As the third step, the PRI has launched a tender process to appoint an external consultant to work in partnership with PRI signatories and industry association partners to develop guidance for LPs and General Partners (GP) on how to report on and monitor the ESG integration practices of GPs during the lifetime of the fund. Information on the tender process is available here. The deadline for applications is 1 March 2017. The PRI is seeking signatories to join a working group that will work in partnership with the consultant. Information on the project and the application process to the working group is available here. The deadline for applications is 28 April 2017.
PRI-PEI Responsible Investment Forum, Berlin, 28 September (held adjacent to PRI in Person 2017, details to follow)
How-to video on CDC ESG Toolkit for Fund Managers (December 2016) is a short video to demonstrate exactly how PRI signatories can use the highly valued and free-to-use Toolkit to best effect when developing their own approaches to responsible investment in private equity.
IIGCC-PRI guide on climate change for private equity investors (May 2016) provides guidance on assessing climate change risks and opportunities in private equity investments.
Report on progress: Private equity (March 2016) provides the most reliable snapshot of responsible investment in private equity to date, based on 306 PRI signatories’ submissions to the PRI Reporting Framework on their private equity investments in 2014/5.
LP responsible investment due diligence questionnaire (also available in Word and Excel format, and in French) and How to use it (November 2015) is an adaptable list of questions that LPs can ask GPs pre-commitment to understand and evaluate how GPs integrate material ESG factors into their investment practices.
Integrating ESG in private equity: A guide for general partners (also available in French), case studies supplement (also available in Japanese) and short summary (April 2014) advises GPs to develop a framework for integrating ESG factors into their investment activities, linking this to organisational governance, structure and culture.
The integration of ESG issues in M&A transactions: Trade buyer survey results (January 2013) summarises the results of a PwC survey into trade buyers’ attitudes towards evaluating ESG risks and opportunities in their M&A activities.
Responsible investment in private equity: A guide for limited partners, 2nd edition (June 2011) helps LPs to develop their approach to responsible investment in private equity.
The PRI has been working with UNEP FI’s Property Working Group (PWG) to explore how the Principles apply to property investment and management and the Global Real Estate Sustainability Benchmark (GRESB) to improve reporting.
Sustainable real estate investment, Implementing the Paris Climate Agreement: An Action Framework (February 2016) presents investors, managers and advisers with easy to understand and apply actions in a framework that distils relevant industry material published over the past five years.
Sustainability Metrics: Translation and Impact on Property Investment and Management (executive summary, flyer) (May 2014) provides a framework for corporate real estate sustainability management (CRESM) system for property investment and management organisations.
Commercial Real Estate: Unlocking the energy efficiency retrofit investment opportunity (February 2014) outlines why and how asset owners and managers can generate profitable energy efficiency investment opportunities and proactively manage them even in cases where payback is uncertain.
Responsible investment can mitigate risk in the typically long-term, project-based world of infrastructure investment. Incorporating ESG considerations into infrastructure investments can consist of including ESG clauses in RFP processes or managing ESG factors to increase exit value.
The PRI is relaunching a work stream on responsible investment in infrastructure to raise awareness on RI in infrastructure, provide industry guidance on incorporating ESG in infrastructure investing, share good practice, and promote investment into low carbon infrastructure. For more information contact email@example.com.
Green Infrastructure Investment Coalition The aim of the Green Infrastructure Investment Coalition (GIIC) is to connect investors, development banks and advisors to countries seeking finance for green infrastructure developments. The work of the Coalition allows governments and project developers to present their pipeline of projects five years into the future (min. US$100 million deal size) and access new sources of funding from international investors, providing investors with early visibility of future deal-flow and give the opportunity to provide feedback on the structuring of financing instruments.
The GIIC is organised by the PRI, the Climate Bonds Initiative, ICMIF, UNEP Inquiry and LTIIA.
For more information on the GIIC and the PRI’s infrastructure work, watch the webinar: Introducing the Green Infrastructure Investment Coalition (November 2016), including a preview of PRI’s proposed infrastructure strategy.
The case study compendium Responsible investment in infrastructure was published in March 2012.
It provides examples of how investors have incorporated ESG considerations into infrastructure investments.
KEY CONTACT: Marisol Hernandez
- Environmental and social themed investing (October 2012) defines what the PRI means by E&S-themed investing and how this type of investing relates to responsible investment.
- Understanding the impact of your investments (July 2013) provides an introduction to environmental and social impact performance measurement and reporting.
- Guidance for PRI signatories on how to use IRIS (February 2015). Managed by the Global Impact Investing Network (GIIN), IRIS is the catalogue of generally-accepted performance metrics to measure social, environmental, and financial success.
- PRI Webinar - Impact investing in emerging markets (February 2014) described how indirect investors can efficiently monitor and improve the environmental and social outcomes of their investments, including how collaboration and publicly available tools can help investors in this process.
- The environmental and social impact of investments - webinar summary (November 2013) explored questions around what impact is and how positive environmental and social impacts can be achieved through different responsible investment approaches.
- Fiduciary duty and environmental and social themed investing – summary of US discussion (July 2013)
Case studies: institutional investors’ environmental and social themed investments
These case studies, published in October 2013, demonstrate how E&S themed investing can form a valuable part of an institutional investors’ approach to responsible investment. Each focuses on a particularly distinctive aspect of the investors’ process or the investments chosen.
Responsible investment in commodities allows investors to address risks such as: labour rights, human rights, land/resource rights, waste, water scarcity and pollution levels in assets, such as forests and agricultural land, and companies throughout the supply chain. Applying responsible investment to investments in commodity derivatives can address systemic issues such as volatile prices and unstable markets.
Investors can contribute to economic development and entrepreneurial activity by investing in inclusive finance, but these investments can carry financial and reputational risks. To mitigate such risks, a group of investors launched the Principles for Investors in Inclusive Finance (PIIF) in 2011.
The PIIF are housed within the PRI. In signing the Principles, investors commit to:
1. expanding the range of financial services available to low-income people;
2. integrating client protection into all their policies and practices;
3. treating their investees fairly, with clear and balanced contracts, and dispute resolution procedures;
4. integrating ESG factors into their policies and reporting;
5. promoting transparency in all their operations;
6. pursuing balanced long-term returns that reflect the interests of clients, retail providers and end investors;
7. working together to develop common investor standards on inclusive finance.
Download the full text of the Principles for Investors in Inclusive Finance.
MEET THE INVESTMENT PRACTICES TEAM:
Don Gerritsen, Senior Manager, Asset Owner Insight
Don joined the PRI in 2015. He leads PRI’s Asset Owner Insight team.
Prior to joining PRI, Don worked with the Dutch Investors Association for Sustainable Development, and with the Global Climate Change and Sustainability Services Network team at KPMG.
Don also currently works as Guest Lecturer Stakeholder Engagement at the Erasmus University Rotterdam, the Netherlands. His educational background is in investment management, international law and environmental sciences.
Justin Sloggett, Senior Manager, Listed equity and hedge funds
Justin joined the PRI in June 2014. He is responsible for listed equity and hedge funds work.
Before the PRI, Justin worked for the Co-operative Asset Management as a responsible investment analyst, where he conducted ESG research and engagement projects on companies in the industrial, energy, technology, transportation, and utilities sectors. Justin has also worked for F&C Asset Management PLC as an investment support analyst, where he worked alongside fund managers and performed middle office duties, such as performance analysis, and cash management and forecasting.
Justin graduated from the University of Nottingham with a master's degree of Mechanical Engineering and is a CFA charterholder.
Archie Beeching, Senior Manager, Fixed income and infrastructure
Archie joined the PRI in January 2012. He is responsible for fixed income and infrastructure work.
Archie has previous experience working in research and reporting roles for Australian CSR consultant Net Balance and as an ESG research and engagement specialist at Regnan. In these roles he produced reports on sustainability within corporate supply chains and the relationship between human rights and investment. Before joining the responsible investment industry, he worked in account management and business development in the IT industry.
Archie holds a master's degree of Environmental Management from the University of New South Wales and a master's degree of Spanish Literature from Edinburgh University.
Kurt Morriesen, Senior Manager, PIIF and E&S-themed
Kurt joined the PRI in August 2015. He is responsible for work on environmental & social themed investments projects and works with the Principles for Investors in Inclusive Finance (PIIF).
Prior to joining the PRI, Kurt worked for Eunomix, assisting mining companies in Southern Africa in redesigning corporate and sustainability strategies. He previously worked with the World Bank, International Finance Corporation (IFC) and the Inter-American Development Bank (IADB) on advisory and investment projects focusing on impact investing and public-private partnerships (PPPs).
Kurt holds an MBA from Hult International Business School, a master's degree in local development from Spain, a certificate on negotiations from Harvard University, a programme on public management from Argentina, and a bachelor's degree in Law from Brazil.
Natasha Buckley, Manager, Private equity
Natasha joined the PRI in August 2011. She is responsible for private equity work.
Before joining the responsible investment industry, Natasha held roles at UBS, the NHS and Simmons & Simmons (Paris).
Natasha has an MSc in International Relations from the London School of Economics and a BA in History from University College London. She has completed the University of Oxford Private Equity Programme at the Saïd Business School, under Professor Tim Jenkinson.
Marisol Hernandez, Manager, Hedge funds
Marisol Hernandez joined the PRI in May 2016, and she is responsible for the hedge funds work.
Marisol has over 10 years of consultancy experience, having previously worked for Allenbridge, advising institutional clients in the allocation of large capital to alternative investments and portfolio optimisation. She has experience on building quant models, hedge funds databases and big data management. Marisol has an extensive asset owner perspective from her experience with The World Pension Summit and Fondo Nacional de Ahorro (National Savings Fund), a Colombian pension fund run by the government.
Marisol has MSc in Financial Engineering, BSc in Industrial Engineering, and is currently reading for a PhD in Economics with focus on Responsible Investment (RI) for institutional clients in alternative investments.
Anna Georgieva, Manager, Fixed income
Anna joined the PRI in November 2016. She manages the PRI’s fixed income work.
Anna was previously a senior analyst at Trucost (now S&P Global). She worked with financial institutions and corporate clients to deliver environmental data, insights, and tools for investment decision making, and to inform business decisions along the entire value chain.
In her role she worked closely on green bonds strategy and implementation. She was part of a team delivering the Natural Capital Protocol Food and Beverage Sector Guide on behalf of the Natural Capital Coalition. She has also co-authored a number of publications for organisations including the Economics of Ecosystems and Biodiversity (TEEB), the United Nations Environment Programme (UNEP), and the Clean Air Alliance of China (CAAC).
Anna holds a master’s degree in Environmental Technology from Imperial College London, specialising in Environmental Economics and Policy, as well as a BSc (Hons) in Business Administration from the University of Bath.
She speaks fluent Bulgarian and French.
Hilkka Komulainen, Project Manager, Infrastructure
Hilkka Komulainen joined the PRI in March 2016. She manages PRI’s Infrastructure work.
Prior to joining the PRI, Hilkka was a policy analyst at the Organisation for Economic Cooperation and Development (OECD), on topics including investment policy, responsible business and supply chain due diligence, climate change and infrastructure. She was previously a management consultant in the financial services and energy sectors in France, and worked at United Nations agencies in Denmark and Lebanon.
Hilkka has an MA in International Relations from the University of Edinburgh and a Masters in International Public Management from the Paris School of International Affairs at Sciences Po Paris.