By Fiona Reynolds, CEO (@fireynolds), PRI
Redesigned 2021 reporting cycle kicks off
After two years of planning, two major signatory consultations, 17 global workshops and several signatory focus groups, last month the redesigned 2021 reporting cycle opened to investor signatories. The new Framework is simultaneously simpler to complete, yet more challenging to achieve a high score. And to help signatories navigate the new Framework, we’ve developed a range of resources including webinars, short guides, mapping documents and definitions of the most used terms.
We’re now inviting investors to submit their report by 29 April and service providers by 13 May. We are also looking forward to receiving signatory feedback through our built-in feedback function in the reporting tool during this pilot year, so we can continue to improve the process. All feedback will be analysed carefully, and we make any necessary changes to the pilot framework following consultation with the PRI board.
Gearing up for COP26
Climate has a been a critical theme for signatories across the quarter, as we gear up for the rescheduled COP 26 in Glasgow this November. The conference is significant – representing the world’s last chance to tackle climate change.
At PRI we are prioritising COP26, focusing on government ambition as well as investor climate action. Finance will be a major theme, with global investors having a key role to play in financing the transition.
We’ve recently launched a page on our website dedicated to COP26 as well as an investor guide to climate collaboration jointly with the London Stock Exchange Group.
In addition, this quarter saw the publication of the Target Setting Protocol by the Net-Zero Asset Owner Alliance and a roadmap of policies for Japan to deliver a net zero economy by 2050. The Inevitable Policy Response 2021 and the Climate Action 100+ benchmark will also launch this month.
A new dawn for RI in the United States
We’re continuing to keep our eyes on the United States since the Biden-Harris administration took to the White House in January, signalling a new direction for the world’s largest economy. We’re now watching the rapid shift in US policy developments closely, a welcome change after an alarming lack of progress from the previous administration.
Already President Biden has signed several executive orders to address the climate crisis, re-joining the Paris Agreement and setting goals for a net-zero economy by 2050, creating a Leaders’ Climate Summit and National Climate Task Force, addressing environmental justice and centering climate change in foreign and domestic policy. In addition, several agency actions are under review, including Financial Factors in Selecting Plan Investments, which went into effect just before the inauguration.
We’ve also seen some promising leadership nominations, which will help to set the tone and way in which work is conducted. We remain optimistic about the crucial role responsible investment will serve in US policymaking and global climate efforts. You can find our more in our updated PRI 2021 US Policies briefing.
Making voting count
Stewardship was also an important theme of the quarter. In a recent blog, I discussed the importance of voting and other stewardship tools as a means to align portfolios with the interests of beneficiaries and society more broadly. Progress is being made; for example, in 2020 despite the onset of the COVID-19 pandemic, a record number of resolutions addressing issues from climate change to diversity passed at annual meetings globally. However, there is much more to be done and we’re working with PRI signatories to usher in more ambitious and effective stewardship practices in line with our Active Ownership 2.0 programme.
We also published a new guide on Principle-based voting on shareholder resolutions. It sets out how investors can develop and apply high-level principles to govern their use of voting on shareholder resolutions. The guide outlines what voting principles are, why they are needed and how they can be applied.
In addition, for those just getting started in their active ownership practices, we published a introductory guide to stewardship.
Steady signatory growth
Despite the pandemic, signatory growth has remained strong, echoing the ever-increasing role of responsible investment globally. So far, this financial year, we have welcomed 915 new signatories to the PRI; this includes 100 asset owners, taking us to over 600 asset owner signatories globally.
New joiners this quarter include MassMutual, The Dai-ichi Frontier Life Insurance Co., Ltd., Kirk Kapital Fondsmæglerselskab A/S, AFAP SURA, ABB Plan, Alameda County Treasurer-Tax Collector, Pension Fund of Credit Suisse Group, SHAM – RELYENS GROUP and many more.
Countdown to three-year strategy launch
Finally, as we close in on the end of the financial year, we’re gearing up to release our new three-year strategy under the theme of ‘building a bridge between financial risk and real-world outcomes’. We’re looking forward to launching our strategic plan in April and to taking on this ambitious vision together with global PRI signatories.
This blog is written by PRI staff members and guest contributors. Our goal is to contribute to the broader debate around topical issues and to help showcase some of our research and other work that we undertake in support of our signatories. Please note that although you can expect to find some posts here that broadly accord with the PRI’s official views, the blog authors write in their individual capacity and there is no “house view”. Nor do the views and opinions expressed on this blog constitute financial or other professional advice. If you have any questions, please contact us at [email protected].
