Sustainable financial system (SFS)

The PRI recognises that the financial system is not operating sustainably and often fails society. We are working with investors, policy makers, regulators and others in the sector to reshape the system so it supports sustainable economic development.

Our work looks at market practices, structures and actors within the financial system to understand and challenge the barriers to achieving a sustainable financial system.

This work is one of the PRI’s business priorities set out within our 10 Year Blueprint, and is supported by nine priority conditions that need to be addressed to transform the financial system. By addressing these conditions, we believe we can achieve a more sustainable financial system:

  1. Short-term investment objectives
  2. Attention to beneficiary interests
  3. Policy maker influence on markets
  4. Capture of government policy by vested interests
  5. Influence of brokers, rating agencies, advisors and consultants on investment decisions
  6. Principal-agent relationships in the investment chain
  7. Cultures of financialisation and rent-seeking in market actors
  8. Investment incentives misaligned with sustainable economic development
  9. Investor process, practices, capacities and competencies

You can find out more about what we do below.

Why the PRI is working towards a sustainable financial system

The financial system is not operating sustainably and it often fails society. We need to realign the system with sustainable, equitable economies. Our signatories have a central role to play.

Retirement systems

The PRI examined the sustainability of the Australian, UK and US retirement systems and published country reports in 2020, which included seven recommendations for policymakers, regulators and industry. These reports were followed by a country report for Japan in 2021. Our work involves leading these reports and supporting their ongoing implementation.

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Private retirement systems and sustainability

Research on the sustainability of private retirement systems with recommendations for policymakers and the industry.

Financial system actors

At the PRI, we work with actors from across the financial system to encourage them to incorporate, and align with, sustainable outcomes. An overview of these actors can be seen in the diagram below.

Our work with financial system actors includes:

CRA

Credit risk and ratings

The PRI is facilitating a dialogue between credit ratings agencies and investors to cultivate a common language, discuss ESG risks to creditworthiness and bridge disconnects.

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Investment consultants services review

Most consultants and their asset owner clients are failing to consider ESG issues in investment practice – despite growing evidence of the financial materiality of ESG issues to portfolio value.

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Investment consultants and ESG: an asset owner guide

Investment consultants advise on how trillions of dollars are invested worldwide, but most consultants are failing to consider the role that ESG issues play in investment performance.

Get in touch

To learn more about what we do, contact us.