By Martin Skancke, PRI Board Chair
In the context of the global COVID-19 pandemic, it has been encouraging to see increased interest, rigour and debate around responsible investment. Investors increasingly understand that their duty to fulfil their obligations to clients can be impacted in fundamental and lasting ways by environmental, social and governance (ESG) trends – and the sustainability outcomes that result from them.
The year has brought change, in the transition to a new CEO following Fiona Reynolds’s departure, and challenge, with the difficult delivery of the reporting and assessment programme.
Reporting and assessment
Reporting and assessment has been the critical item for the board - and by extension, the executive - this year. We have been listening to signatory feedback on the design and functionality, as well as balancing the need to deliver the 2021 Transparency/Assessment Reports and a viable reporting process in 2023.
The board has established a dedicated committee to oversee the programme, as well as employing an external consultancy to be a critical friend of the programme from an outside perspective. Transparency Reports and Assessment Reports are rolling out to signatories in September 2022, alongside an updated 2021 assessment methodology. Further updates will follow on the launch of the 2023 reporting.
We recognise that we fell short of what signatories should expect from the PRI, and appreciate the patience that signatories have shown. The board has been reflecting on lessons learned, as well as on the broader future of reporting beyond 2023. Signatories tell us that they value the learning, benchmarking and accountability that PRI reporting provides, but with the reporting landscape changing rapidly, the PRI needs to deliver this value to signatories without duplicating effort.
We have appointed an inaugural Chief Reporting Officer, Cathrine Armour, to drive these efforts.
CEO recruitment is obviously one of the most critical roles of any board. Firstly I want to thank our former CEO, Fiona Reynolds, for her leadership of the PRI since 2013, and her role in achieving a smooth transition. In Fiona’s tenure she led the growth in scope and reach of the organisation, and on a personal note, I really valued working with her – in a relationship of high support and high challenge.
Through a dedicated board committee, we conducted an extensive and global search process that was committed to enabling a strong and diverse pool of candidates, particularly encompassing ethnic and gender diversity.
We were delighted to appoint David Atkin as the new CEO, starting in December 2021. David has brought a wealth of investment industry experience, having served as CEO of three Australian asset owners – Cbus, ESSSuper and Just Superfund – and most recently as Deputy CEO of investment manager AMP Capital. David also has a strong understanding of, and commitment to, the PRI’s mission, having previously served as a PRI Board director (2009 -2015).
At the end of the 2021-24 strategy setting process the board committed to a conversation with signatories about the PRI’s mission. A formal consultation to deliver this will start later this year.
The PRI’s ultimate aim is to enable a sustainable global financial system, as set out in the mission statement, but the board recognises that the external environment has changed significantly since the mission statement was developed: the Paris Agreement and the SDGs have been adopted, terminology is different and investor expectations and practices are evolving.
We place considerable value and effort in consulting with our signatories – without signatory engagement, we lose our relevance and our ability to enable our ultimate aim. Having a structured conversation with signatories on the PRI mission, our role and the value that we provide to you, in the context of a rapidly changing external environment, will be an excellent foundation for setting our future priorities and a more agile strategy process.
The PRI as an organisation needs to continue to develop to serve a growing signatory base as responsible investment rapidly evolves. This year the board commissioned an external review of our financial, business and operating models, which resulted in recommendations on organisational change, evolution of the operating model, a digital transformation programme and internal governance and risk frameworks – work on some of which has already begun, and will continue in the year ahead.
Thank you to the PRI team for your passion, expertise and hard work. Thank you to signatories for your continued engagement on responsible investment, continuing to learn, collaborate and share on this critical agenda.
For more information on the work of the board and its committees over the past year, see the PRI board report.
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