By Fiona Reynolds, CEO (@fireynolds), PRI

Fiona Reynolds

Across the past quarter we have continued to support our signatory base in the movement to build back better from the COVID-19 pandemic. In the face of various levels of second waves, restrictions on our lives and significant global health and socioeconomic challenges, it was encouraging to see continued high-levels of engagement from our signatory base.

Against this challenging and unprecedented backdrop, this quarter saw the launch of our three-year strategy consultation. I’d like to extend my thanks to all of you who took the time to provide feedback on our draft plans. All your thoughts and ideas will go to the Board for review before we finalise the strategy and release it on 1 April next year.

Climate action remains critical

This week marks the fifth anniversary of the Paris Agreement, serving as a stark reminder that we’re still significantly off-track in limiting global temperature rise to 1.5C. However, this milestone must also serve as a rallying point to deliver more ambitious NDCs, including global net-zero commitments.

Climate change continues to be a top priority for our signatories as we approach 2021. With COP26 taking place in the UK in November, PRI will support the Race to Zero global campaign. We will continue to encourage signatory action on climate—signposting, giving guidance and driving good practice implementation across all four of investors’ key levers: engagement, investment, disclosure and policy and advocacy.

With social issues taking centre stage in light of the pandemic, we will encourage investors to incorporate thinking on the just transition into their climate action plans and to ensure respect for human rights, in line with the UN Guiding Principles. This quarter we launched a new report on Why and how investors should act on human rights and had a human rights op ed featured in Raconteur in the UK.

We anticipate that the United States will re-join the Paris Agreement in February next year—a bright spot in global climate action. We are actively engaging with Biden’s transition team on TCFD and on US domestic climate policy. The Inevitable Policy Response under Biden’s Climate Plan provides a post-election analysis for signatories.

Driving meaningful data

Earlier in the year we kicked off an important new collaboration between PRI and the World Business Council for Sustainable Development (WBCSD). Through this collaboration, we are working to put sustainability at the heart of financial and strategic decision-making by facilitating direct conversations between investors and business about what decision-useful sustainability-related information is, and how that information can be best used.

As part of the initiative, PRI and WBCSD are jointly convening a group of leading CIOs and CFOs to support the efforts of regulatory and standard setter initiatives and to ensure these initiatives reflect the needs of investors and companies. I encourage you to find out more and for CIOs and CFOs to apply.

2021 Reporting and Assessment Framework launch

After two years of planning, two major signatory consultations, 17 global workshops and several signatory focus groups, last month we were delighted to launch the new redesigned 2021 Reporting Framework. Next year, for the first time, signatories will report on their approach to sustainability outcomes and be scored on the AUM coverage of their ESG practices as well as on some of their TCFD-based disclosures. These are just a few of the changes that will make this Framework even better and simultaneously simpler to complete yet more challenging to achieve a high score.

Signatories are invited to download the new modules in preparation for the 2021 reporting cycle and to read more about the process behind the release.

New SAM guides

ESG considerations should be central to the relationship between asset owners and investment managers and addressed at every stage; from setting the initial investment strategy to drafting requests for proposals and in selection, appointment and monitoring (SAM). More and more clients want it, regulators demand it and academic and industry evidence supports it. So, as part of our programme to help asset owners address responsible investment, last month we launched new guidance, providing three-steps to ensure the people, process and expertise are in place to meet ESG requirements.

Following on from this publication, we are now seeking to highlight innovative and practical examples of responsible investment in the SAM process. Signatories can submit their case studies to PRI by 4th January 2021.

Strong signatory growth

Signatory growth remained strong over the past three months and we were happy to welcome 256 new signatories to the PRI. This includes 22 new asset owners such as European Investment Fund, Covéa, Pensionskasse des Bundes PUBLICA, AFP PlanVital Una compañia GENERALI, CNO Financial Group, Fondo de Ahorro de Panamá and many more.

Looking ahead

Finally, as the year comes to a close, I’d like to thank all our signatories for their continued input and support during this unprecedented year. Despite the many barriers and challenges we have all faced, we’ve found PRI’s signatory base even stronger and more engaged in driving forward responsible investment than ever before. I wish you all a much-needed break and time with your loved ones.

With the rollout of a vaccine not far away, 2021 is shaping up to be far more promising. I look forward to working with you all next year to ensure that we build back better and continue to drive responsible investment forward across the globe.

 

 

 

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 blog@unpri.org.