Chair, Martin Skancke
As we look back over the past year, delivering on the ambitious agenda outlined in our Blueprint for responsible investment has been the focus of much of our work.
One of our first priorities was to empower asset owners. In recent months, we have produced two significant guides for them: one focusing on helping them craft a clear and explicit investment strategy and another on improving the manager selection process.
Another core aspect of the Blueprint is climate change. As part of our climate commitments, we introduced for the first time new, completely voluntary climate-related indicators to our Reporting Framework based on the TCFD recommendations. Out of the 1,449 reporting signatories this year, 480 signatories (28% AO, 72% IM) opting into report on voluntary climate indicators. We thought this was a good result and higher than we were expecting. These results underscore how many of our signatories are keen to disclose how they are tackling the transition to a low-carbon economy.
Apart from climate activities, we are continuing to focus our efforts on working with institutional investors to create a more sustainable financial system and mapping the PRI’s work to the SDGs.
One of our longstanding commitments has been to bring the PRI closer to our signatories through more regional support. Last year, we hired a first-ever head of China to meet the growing interest in responsible investment that we see not only in that country but also in other countries across the region, most notably in Malaysia, Singapore and South Korea. Not content to stand still In Europe, we’ve added a head of Benelux and a head of Nordic, CEE and CIS.
A meaningful commitment
Accountability is another priority in the Blueprint. Following considerable consultation and discussion, the PRI is implementing minimum requirements for signatories. We will work closely with those who are not meeting the requirements in order to help them improve their performance. Failure to meet these requirements by 2020 would result in delisting.
But, in order to further move responsible investment forward, it is equally important to recognise leadership. We will highlight and share good practices being carried out by our signatories. At this year’s PRI in Person in San Francisco, we will be announcing the establishment of leadership awards, the first of which will be awarded at PRI in Person 2019 in Paris.
I look forward to working with our signatories to accomplish the plans laid out in the Blueprint
There is still much that we want to accomplish with regard to the Blueprint and other ESG-related activities. I look forward to working with the PRI senior management team and of course, with our signatories, on expanding these initiatives in the coming months. Thank you for your support.
CEO, Fiona Reynolds
It’s only been a year since the launch of our Blueprint for responsible investment, and we’ve been in full swing implementing the projects that we believe will bring real value to our signatories, as well as create a sustainable global financial system.
Tackling climate change is a central issue in the Blueprint, and remains our signatories’ number one concern and a lot of our work has been geared towards convening investors on the subject. For example, the Investor Agenda, which we will discuss in detail at this year’s PRI in Person in San Francisco, encourages investors to disclose on what they are doing to transition to a low-carbon environment.
A just transition
While our signatories have shown us their commitment to the low-carbon transition, incorporating the social effects of climate change – such as stranded workers and displaced communities – into climate strategies has yet to be addressed. We’re receiving an increasing number of requests from signatories to expand our work on social issues and explore how climate change may affect communities.
It is critical that we identify the investor contribution to the just transition to both curb economic risks and capitalise on new opportunities. Doing so will be key to realising the goals of the Paris Agreement, as well as the Sustainable Development Goals. We are developing a project in conjunction with the Institute for Responsible Investment at the Harvard Kennedy School and Grantham Research Institute, London School of Economics, to identify the role that investors can play in the transition and hope to present draft guidance at COP24 in Poland.
With Ceres, we also started a collaborative engagement on deforestation. Looking to the future, we will turn our focus to plastics and look more in-depth at how investors can tackle water management. These issues are all impacts of climate change which we must keep front of mind.
Restructuring for sustainability
We have also continued our work as an international observer to the European Commission’s High-Level Expert Group (HLEG) on Sustainable Finance, feeding into the recommendations of their report. Their roadmap for implementing the recommendations, the Action plan for financing sustainable growth sets the stage for a true re-alignment of the European financial system.
The European Commission’s new legislative proposals are moving the financial system in Europe in the right direction. We are confident these initiatives will help restructure the financial system, putting sustainability at its heart. We will continue to advance this with the European Commission on its EU Technical Expert Group on Sustainable Finance and through our fiduciary duty work.
An equitable world
Everything we have done this year – and everything we plan to do in the future – cannot be done without the support of our signatories. We are now a 2,000-strong force and together will continue to tackle the barriers to a sustainable financial system. Thanks to all of you for everything you do to create a better, more equitable world.
And none of this year’s achievements would be possible without the PRI staff, who work tirelessly and passionately to advance responsible investment.
We are now a 2,000-strong force and together will continue to tackle the barriers to a sustainable financial system
I would also like to thank the PRI Board and Martin Skancke for their excellent leadership over the past 12 months. Here’s to another year of working together to create a truly sustainable global economy that works for everyone.