Introduction from the Chair
The board remains focused on realising the ambitions of the PRI’s Blueprint for responsible investment and providing value to all signatories. Despite a tumultuous year, with the COVID-19 pandemic, the PRI has proved resilient and signatory engagement and interest have grown.
The board met for eleven virtual meetings. These shorter meetings meant that key discussions were often broken down and discussed over a series of meetings. There were three key ongoing discussions throughout the year:
- COVID-19 and organisational resilience. The board was regularly kept informed of the organisational response to COVID-19. The Executive put in place measures to support flexible working as well as supporting the health and well-being of staff during the pandemic. The board considered several possible scenarios on the possible financial impact of COVID-19 and agreed a conservative approach to the budget, reviewing and adjusting regularly. The organisation proved to be resilient throughout the pandemic, with high levels of reporting in 2020, good signatory retention, and better than expected signatory recruitment. Most importantly, within the broader context of an increase in interest in ESG and broader sustainability during the pandemic, there was a notable increase in signatory participation in virtual PRI events and activities.
- 2021-24 strategy. An important discussion for the board was the signatory feedback on the strategy consultation paper. Signatories overall were generally very supportive of the strategy. Signatories support the core of the PRI’s work, providing resources and support for ESG incorporation. This provides value for signatories. Signatories have also been calling for support from the PRI on the Sustainable Development Goals and sustainability outcomes. However, for a lot of engaged signatories, we learnt that we needed to provide more context for the strategy, and insight into how the board was thinking about the PRI’s direction, above and beyond the key initiatives that we plan to deliver in this strategy period. The board aimed to rectify this through a more in-depth strategic plan. Also, there were reservations about a new purpose statement. The intention was to draft more of an elevator pitch, but the board understands the signatory feedback. The board has committed to a future conversation with signatories on the PRI mission and purpose. The board believes now is a good time to review the mission statement with signatories as an opportunity to engage with signatories, have a more structured discussion on these issues, and strengthen a shared vision. The board will communicate further with signatories about the scope and timing of this conversation. Thank you to all signatories that participated in the consultation. The PRI is a signatory-based organisation and we need to be guided by you in the context of the Principles and the PRI mission.
- Reporting and Assessment Framework pilot. Throughout the year the board received updates on the new Reporting and Assessment Framework, including development of the content (questions and structure), signatory focus group feedback on the content, the reporting tool infrastructure, and signatory communications. Regrettably the Reporting and Assessment Framework pilot did not proceed as planned. The board plans to oversee a thorough review of the implementation of the pilot and put steps in place to ensure that the 2021 transparency reports and assessments are delivered as well as the successful launch and execution of the next reporting period in early 2023.
In January 2021 the board welcomed for further terms two re-elected directors, Renosi Mokate (GEPF) and Tycho Sneyers (LGT Capital Partners). In July 2021 Takeshi Kimura, Special Adviser to the Board, Nippon Life Insurance Company, was elected as a board director by asset owner signatories in a mid-term election. Takeshi replaced Hiro Mizuno (University of Tokyo), who stood down from the board in March 2021. I would like to thank Hiro for his valuable input and dedication over the past four years. The PRI will no doubt continue to work with Hiro as part of his UN Special Envoy role.
The 2021 PRI Board annual election is for four asset owner positions and one investment manager representative position. The PRI Board is encouraging candidates: with governance skills and senior leadership experience; and with demonstrated leadership in responsible investment. In addition to the above, for the asset owner positions, the PRI Board is encouraging candidates from asset owner signatories (with their HQ) in North America and Australasia. Geographical diversity is one critical component of effective debate and decision-making. The PRI is a global organisation, and aims for global representation on its board, particularly within the asset owner positions.
Signatory participation in the signatory voting in October and November is important. The PRI is a membership organisation and to continue to thrive we need to engage signatories with relevant work and activities, and signatories need to keep engaged and active in our governance. The PRI will be asking signatories to elect five directors, approve the SGM minutes, confirm the appointment of the auditor and vote to receive the PRI Annual Report and Accounts.
Lastly, I wanted to thank Fiona Reynolds for her dedication to the PRI over the past nine years. In Fiona’s tenure as CEO of the PRI, she has led the growth in scope and reach of the organisation to investors, policy makers, and other stakeholders around the world. In turn, with tremendous commitment, energy and experience, Fiona has also contributed personally to the growth of responsible investing more broadly. We are very sorry to see Fiona step down as CEO, but fully understand her personal wish to be home in Australia with family.
The Board is responsible for the appointment of the next CEO and has established an ad hoc committee of Board directors to support the search process. The aim is to have the CEO in position towards the beginning of 2022 and obviously have a seamless transition.
I encourage you to read the full PRI Board report. The report is an overview of the work undertaken by the Board over the past year and how we work together with the Executive. The report includes our focus on organisational purpose; the leadership of the Board; integrity measures; decision-making processes, risks and controls; actions to improve our effectiveness; how we are thinking about board diversity and communicating this to signatories; and our efforts to be open and accountable to signatories.
If you would like to discuss any aspect of the PRI’s governance with me, please feel free to email me at firstname.lastname@example.org.