By Fiona Reynolds (@Fireynolds), CEO, PRI
Against the ever-changing backdrop of COVID-19, our focus over the past quarter has continued to evolve as we support our signatories in their ongoing responses to the crisis. I’d like to extend our thanks to the more than 200 investors that contributed to the two COVID-19 PRI signatory participation groups established last quarter – focused on short-term ESG responses and a long-term sustainable recovery.
We are continuing our work in its second phase, namely on ensuring sustainable and inclusive recovery and reform. Our latest briefing sets out a seven-part framework for action detailing how investors can raise their game on policy engagement to support governments as they grapple with the ramifications of the pandemic and work to build back better. You can access all our digital resources on our dedicated COVID-19 webpage.
Human rights
In the past, social issues have often been treated by investors, corporates and governments alike as the poor cousin of ESG, taking a back seat to environmental and governance issues. Fortunately, this is no longer the case. Interest in social issues—or human rights issues—has grown significantly over the past few years and COVID-19 has only further accelerated the need to address these issues.
Interest in social issues has grown significantly over the past few years and COVID-19 has only further accelerated the need to address these issues
Institutional investors’ responsibility to respect human rights is defined in international human rights standards. It was formally and unanimously endorsed by the UN in 2011, and immediately reflected in OECD standards. In our 2019 Reporting Framework, signatories highlighted human and labour rights as a priority issue. In fact, we already have some fantastic signatories who are really doing a lot in this space, but this is not the norm and doesn’t represent the bulk of our signatory base.
Therefore, leveraging on this momentum, we are launching our five-year programme on human rights, which involves three stages moving signatories from understanding the UNGPs to transforming and ultimately respecting human rights.
Our new paper, under consultation now, outlines a six-step framework to implement respect for human rights into investment activities built on UNGPs and OECD Guidelines. We will also be incorporating mandatory human rights reporting into our reporting framework.
Policy
This quarter we’ve seen the US taking some worrying backwards policy steps on ESG. We responded to the Department of Labor’s proposed rule for ERISA fiduciaries and published a signatory briefing. We urged them to withdraw the proposal due to concerns that it reflects a basic misunderstanding of ESG integration practices, causes confusion and could lead to costs for plan savers, fiduciaries and service providers. We also published a briefing on US federal climate policy priorities.
Meanwhile in the UK, we’ve just seen mandatory TCFD reporting proposed for large pension funds and in the EU we responded to the renewed sustainable finance strategy, recommending addressing the need for a clear, ambitious and compelling long-term vision for the finance industry, aligned with the Paris Agreement and the SDGs.
Reporting results and climate snapshot
Signatories who completed their PRI 2020 reporting will have received their assessment and transparency reports at the end of July. As always, we encourage you to make use of these as part of your continuous improvement programmes. Of course, the team here at PRI are happy to assist with any further tools or resources you may need to do this.
Your summary score card is a great resource to publish (or replicate) as it provides the full picture of your reporting, providing the context of median scores.
From the result of 2016-2020 reporting we’ve compiled our first climate snapshot which presents the results from our signatories reporting against the TCFD governance and strategy indicators.
Digital events programme
Following the postponement of PRI in Person, our digital events series is now in full swing. We are delighted to be hosting three major online events over the next few months: PRI APAC Digital Symposium on 14-17 September, PRI Digital Forum: EMEA on 21-22 October and PRI Digital Forum: Americas on 17-18 November. Our annual Signatory General Meeting (SGM) will take place alongside the EMEA Forum on the 21 October – running at two timeslots to cover time zones.
Featuring keynote presentations, panel discussions and breakout sessions, these events will address the impact of COVID-19 on responsible investment as well as the latest developments in climate action, human rights, stewardship, RI policy and more.
In addition, since the start of this year we have been working hard to significantly expand our calendar of webinars and podcasts, continuing to convene and educate signatories remotely in the absence of in-person events. Today have a significant library of recent content that signatories can watch or listen to on demand.
Signatory growth
This quarter we were very happy to welcome 262 new signatories to the PRI, representing an 8.6 percent growth in our global signatory base. This includes 43 new asset owners such as Société Générale Assurances, AFP Crecer, Kåpan Pensioner, Fondoposte, OPC CCSS, Ontario Pension Board, Porvenir, SOKA-BAU, R+V Versicherung AG and many more.
