Central to our PRI in a Changing World consultation has been the opportunity for signatories to tell us about their evolving needs and challenges.
An important part of what we heard is that within such a large and diverse signatory base, their contexts and needs differ.
As we highlighted at the end of 2023, the PRI Board responded to signatory feedback and has introduced a flexible approach to reporting in 2024 – see December 2023 R&A Update.
For many signatories, reporting directly to the PRI provides significant value – especially for those that are at the beginning of their responsible investment journey and as a tool for comparing practices with peers. This value was demonstrated in 2023, when we saw a significant uptake of voluntary reporting – nearly 1,100 signatories opted to report in their grace period.
For others, reporting is now a less valuable exercise, relative to the effort required, although demonstrating action on the Principles still matters.
As we continue to evolve the ways of reporting, Reporting and Assessment this year will be voluntary for all investor signatories that reported in 2023. For those investor signatories that have yet to report – i.e. those that have joined in the last two years but did not report voluntarily in 2023 – reporting will be mandatory.
More on 2024 reporting coming soon
We will provide signatories with more information on 2024 reporting soon, including publishing the 2024 reporting modules alongside information on how to prepare for the next reporting cycle. In the meantime, we have prepared some frequently asked questions and answers to help signatories understand the decision we have outlined. If you have further questions, please get in touch at [email protected].
Frequently asked questions
THE EVOLUTION OF 2024 REPORTING AND HOW IT APPLIES TO SIGNATORIES
How is PRI reporting evolving in 2024 and how does it affect different groups of signatories?
Reporting in 2024 will be optional for all investor signatories that reported in 2023. Reporting remains voluntary for signatories that will be in their grace period in 2024 and remains on hold for service provider signatories.
Reporting will be mandatory for investor signatories that opted not to report in 2023 because they were in their grace period, those that reported on a mandatory basis but did not meet the minimum requirements and those signatories that are in their minimum requirements engagement period.
Signatories that opt to report in 2024, will need to complete all relevant modules to them and all core (mandatory) indicators. In keeping with 2023 reporting, asset owners will not be able to report on asset class modules.
What is the rationale for this reporting evolution?
The regulatory disclosure landscape has changed across many jurisdictions since the PRI first launched its Reporting Framework, with some signatories already reporting through local market frameworks. Furthermore, we have received feedback from some signatories during the PRI in a Changing World Consultation that the value of annual reporting relative to the effort required varies significantly between asset owners and investment managers, depending on their size and jurisdiction. These factors have informed the more flexible approach to reporting that we are applying in 2024.
TRANSPARENCY AND DISCLOSURE
Are more signatories going to be able to keep their reports private in 2024?
No. Signatories only have the option to keep their entire report private if they report in their grace period, and this will not change in 2024. Optional reporting will apply to the signatory categories as outlined above, regardless of disclosure choice.
2024 REPORTING FRAMEWORK AND OUTPUTS
Will the Reporting Framework change significantly this year?
No, the 2024 Reporting Framework will not change significantly this year.
As part of our effort to continue improving signatories’ reporting experience, we will implement automated pre-filling for all signatories that reported in 2023. This should help to build on our reporting successes while creating a more seamless experience for signatories.
Minor changes to the content of the 2024 Reporting Framework include:
updating relevant climate-related indicators to ensure they remain aligned with the Net Zero Asset Owners Alliance target setting protocol and can support members that choose to report on their net-zero requirements through the PRI’s Reporting Framework; and
fixing errors identified during the 2023 reporting cycle and improving the logic and clarity of certain indicators.
We will be releasing more details about the 2024 Reporting Framework modules and window in the coming weeks. Please check the R&A Updates page for more updates.
What outputs will signatories receive if they report in 2024?
Signatories that report in 2024 will receive Transparency and Assessment Reports, in line with our normal reporting processes. If they submit the same information as they did in 2023 (i.e. they confirm the pre-filled answers to each indicator without making any changes) then their 2024 outputs will reflect that. If signatories eligible for optional reporting choose not to report, they will not receive any outputs for this reporting year.
FAILURE TO REPORT, MINIMUM REQUIREMENTS AND ACCOUNTABILITY
Will signatories be delisted for failing to report in 2024?
As reporting in 2024 is optional for investor signatories that reported last year, as well as those in their grace period, these signatories will not be delisted if they choose not to report.
For mandatory reporters, signatories that fail to report by the given deadline will be considered for delisting, as outlined in the Signatory Rules.
Will our minimum requirements engagement and delisting work continue in 2024?
We have started our engagement with signatories that did not meet the minimum requirements in a mandatory reporting year and will continue to work with them in the coming months.
Signatories that did not meet the minimum requirements in 2023 will be required to in 2024 and demonstrate an improvement in their practices.
We will assess the information of all signatories that report in 2024 to identify those that do not meet the minimum requirements. For those that are not in their grace period (i.e. where reporting would be mandatory in normal circumstances), they would then enter the two-year/two-cycle engagement process.
How can signatories update the PRI on any changes to their organisational structure, practices or operations?
Signatories will be able to update the PRI on any relevant changes by submitting a complete 2024 report. We are making this process easier with the introduction of pre-filling. Signatories’ 2023 responses will be pre-populated in the Reporting Tool, meaning they can confirm and submit the same information for 2024 if nothing has changed, or they can make changes to specific answers or sections of the survey, without having to start from scratch.
As per our normal processes, signatories can also complete a membership update form to update account information such as the organisation name or address, and to highlight if they have restructured in a way that would impact their signatory type.
SERVICE PROVIDER REPORTING
What value do service providers gain from being signatories while their reporting is paused?
Service providers continue to have access to the many resources available for PRI signatories, including the PRI Data Portal, Collaboration Platform, speaker engagements and webinars, and publications. In addition, the PRI lists all service provider signatories and the services they offer in an easily accessible public directory for investors to utilise.
FUTURE OF REPORTING
What form will reporting take in 2025 and beyond? Will the PRI maintain some form of mandatory reporting?
Reporting will continue to evolve in 2025 and beyond. Mandatory reporting is likely to continue in 2025 to maintain some of the benefits it provides, such as accountability and helping signatories to evaluate their progress.
Beyond next year, reporting will be informed by the Progression Pathways, which we are working to co-design and develop with signatories. As the Progression Pathways - Advancing responsible investment practices among PRI signatories concept paper signalled, we expect that mandatory reporting will reduce significantly in the future and may be complemented by a recognition of relevant regulatory reporting obligations or other voluntary initiatives. We will communicate in more detail on the reporting options for signatories once the Progression Pathways co-design process has been finalised.
Will our minimum requirements/accountability work continue beyond 2024?
Signatory accountability is integral to achieving the PRI’s mission and providing value to our signatories. This has been reflected in our recent signatory consultations and engagements, including the PRI in a Changing World consultation.
Our current minimum requirements play an important role, ensuring that a baseline level of responsible investment is achieved across our investor signatory base, and these will remain in place for 2024.
Beyond 2024, we will continue to determine the most effective way to strengthen our accountability mechanisms so that they deliver on our mission and cater to signatories and in parallel to our Progression Pathways co-design work, we will set up a workstream to ensure that we embed accountability mechanisms within these.