Report on Progress 2015: the PRI reveals the highs and lows of responsible investment implementation

PRI Report on Progress 2015

September 08, 2015

The 2015 Report on Progress analyses the results of 936 investors from 48 countries across six continents, giving unprecedented insight into the global responsible investment market. In detailing the responsible investment activities of the signatory base, it forms the PRI’s accountability to the responsible investment community, in combination with the publicly available Transparency Reports that hold signatories to account.

The PRI dataset is the largest on responsible investment in the world and a rich source of insight into the responsible investment industry today.


WE FOUND

The PRI is reaching more investors than ever, but needs to do better amongst asset owners.

  • The assets under management of PRI signatories reached US$59 trillion, demonstrating widespread awareness of responsible investment. However, we estimate that while 63% of professionally managed assets are managed by PRI signatory investment managers, just 19% of assets are held by PRI signatory asset owners (and 75% of this is European asset owners).


Responsible investment activity is more widespread than ever, but needs to be integrated more deeply.

  • There is strong growth in responsible investment activity in fixed income, but the majority of asset owners are focusing on high-level discussions rather than setting requirements about specific strategies.
  • In listed equity, responsible investment activity amongst investment managers appears to have reached saturation point, but systematic integration of issues from across the ESG spectrum into company valuation is rare, and few managers are documenting how ESG considerations have affected decisions.
  • Responsible investment is continuing to spread to alternative asset classes: investors are applying techniques from traditional listed equity and fixed income strategies in hedge funds, as well as starting to develop hedge fund specific strategies.


Asset owners are leading the way in spreading the word about responsible investment.

  • PRI’s asset owners use their public profile and voice to support responsible investment initiatives and public policy, as well as to promote the Principles.
  • However, fewer asset owners are signatories. They promote responsible investment through their interactions with managers, but the detail of how responsible investment will be implemented by managers is often missing.


Signatories are considering climate change but few report having formal strategies.

  • Although some signatories have developed comprehensive responses to climate change, this does not appear to be widespread.


WE ENCOURAGE

All signatories:

  • Take advantage of the PRIfs guidance and support on how to implement responsible investment within asset classes.
  • Use PRI Assessment Reports to compare yourselves to peers and identify areas for improvement. Feed back to the PRI on how Assessment Reports can be developed.
  • Make your voice heard in the discussion of a low-carbon future post-COP21, and sign the Montréal Carbon Pledge.


Asset owners:

  • Ensure that responsible investment policies drive action. Integrate ESG considerations into mainstream investment policies.
  • Consider specific responsible investment strategies when selecting managers and establish ESG-specific clauses in contracts.
  • Talk to managers about their Assessment Reports.


Investment managers:

  • Document the impact of issues from across the ESG spectrum on how you value companies.
  • Measure the environmental and social impacts of your portfolio . both positive and negative.
  • Contribute to industry research and debate – through the PRI or independently – to advance the industry’s understanding of responsible investment strategies and techniques.


For more details, contact reporting@unpri.org.

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