Quarterly update: PRI in Person, credit ratings agencies, climate action

We had nearly 1,000 delegates from 39 countries attending PRI in Person and were particularly delighted to welcome Swedish Minister Per Bolund. Christiana Figueres, who joined via video link set a challenge to our signatories to dedicate 1% of their assets to low-carbon investments each year to 2020. 

As well as sessions relating to our ongoing collaborative engagements, we also looked at new research which showed how successful engagement positively impacts company performance. It showed that engagement adds value beyond financial returns, with both companies and investors benefitting from better communication, learning and political dynamics. For those of you unable to attend the conference this year, you can watch the highlights on our YouTube channel.

Next year, PRI in Person will take place in San Francisco at the same time as the California Climate Summit organised by Governor Jerry Brown. We are working with Governor Brown’s office to ensure the two events complement each other. Register your interest for PRI 2018.

Significant activities on the ESG front

In July we were very pleased to publish—with funding from the Rockefeller Foundation—our report, Shifting perceptions: ESG, credit risk and ratings – part 1: the state of play.  The report builds on the successful launch of the ESG in Credit Ratings Statement last year and outlines how investors and credit rating agencies are paying heed to ESG in credit risk analysis. We have long felt that rating agencies have been a missing part of the ESG puzzle and we have worked hard to engage this audience.

Towards the end of August, we contributed to a paper, Turning Green Momentum into Actions, prepared by the UK-China Green Finance Taskforce. The paper is just one of many actions designed to strengthen bilateral green finance collaboration between these two countries.  To that end, we welcomed the announcement by the UK government that it was establishing a taskforce on green finance. China has raised the bar for green finance activity and now other countries across the globe must ramp up their efforts.

Just ahead of PRI in Person, we took part in Climate Week in New York City, the first international conference in the US following President Trump's announcement to withdraw from the Paris Agreement. It was rewarding to see that despite President Trump’s decision, so many international leaders from business, government and civil society have stood firm in their commitments to climate action.

We also launched a paper outlining the benefits and challenges of investor-company dialogue on director nominations, featuring best practices and lessons learnt from the US and France. Engaging on director nominations: an investor guide emphasises that greater disclosure from companies on their nominations process can help shareholders assess the quality of corporate governance structures.

In the last month, many of you participated in our accountability consultation, which will help us take forward the new accountability mechanisms we’ve been discussing for the last several months and is a core component of our Blueprint. Thanks to all who provided feedback.

Last month, the PRI took a big step forward by hiring our first-ever head of China, who will work closely with Chinese institutional investors on responsible investment initiatives, including green finance, as well as continuing to raise awareness of the PRI and its activities. Obviously, China is of huge strategic importance with considerable institutional investor clout. But to maximise our existing relationships in China and continue building awareness of the importance of ESG issues, we have realised that we need a presence on the ground. This appointment also aligns to our three-year strategic plan of having a greater presence in Asia.

Finally, we were pleased to publish our annual report, outlining the work we have done over the last financial year. For new signatories in particular, we hope this will provide you with a useful overview of the many projects the PRI undertakes.

The PRI in Person conference in Berlin also saw the launch of the PRI’s Francophone programme, which will aim to further promote responsible investment within French-speaking countries. This will be done in a number of ways, notably by producing key PRI material in French and by organising activities specifically for its French-speaking signatories. An advisory committee – to be chaired by Bâtirente’s Daniel Simard - will be established shortly to guide these efforts.

Update on new signatory growth

In the second quarter, we were delighted to welcome 60 new signatories to the PRI. We continued to see strong growth in the US, with nine new signatories, as well as Asia and Australia/New Zealand, with eight new signatories. In the US, we were particularly delighted to welcome the San Francisco Employees Retirement System and the Seattle City Employees' Retirement System (SCERS).

A quick look ahead

In the coming weeks, we will ask signatories to consult on our next three-year strategy plan. We welcome your input as we turn our 10-year Blueprint into a reality.

Next month, we will also be releasing guidance on both ESG engagement for fixed income investors and ESG risk management in the supply chain.

As we look ahead to COP23 in Bonn, we applaud those countries who have reaffirmed their commitment to the Paris Climate Agreement. The momentum around climate change will not be stopped and we hope that the US might reconsider its involvement in the Paris Accord.

In December, we have been invited to take part in President Macron’s Climate Summit on 12 December. The summit’s goal, said the president, would be “to take further action on climate, notably on the financial front,” and to mobilise public and private finance for projects to implement the Paris Agreement. The PRI looks forward to lending its support to these goals.