Minimum requirements for investor membership

In 2018, the PRI implemented minimum requirements for PRI membership for investors. Existing and future asset owner and investment manager signatories who fail to meet these requirements over a two-year period, following extensive engagement with the PRI, will be submitted to the PRI Board for delisting.

The minimum requirements

The minimum requirements in the 2023 Reporting Framework remain the same as in previous years. They are located in the Policy, Governance & Strategy (PGS) module.

Below are the three minimum requirements existing and future asset owner and investment manager signatories are required to meet when reporting on a mandatory basis to the PRI:

Minimum requirement	2023 Policy, Governance & Strategy (PGS) module indicator	2021 Investment & Stewardship Policy (ISP) module indicator	2020 Strategy & Governance (SG) module indicator
RI policy, setting out: overall approach to RI or guidelines on E, S, or G factors, and covers >50% of AUM	PGS 1 PGS 8	ISP 1 ISP 1.1 ISP 3	SG 01
Senior-level oversight of RI	PGS 11	ISP 6	SG 07
Internal/external staff implementing RI	PGS 12	ISP 7	SG 07

You can download the PGS module to view these indicators, which includes up-to-date explanatory notes and additional reporting guidance for each of the minimum requirements, as well as links to supportive resources.

The main objectives of the minimum requirements are:

engaging signatories that have been failing to implement the Principles;
delisting signatories who are not committed to the Principles, as a last resort; and
supporting signatories that are not highly engaged with the PRI to improve their responsible investment practices and demonstrate their commitment to the Principles.

Guidance document for 2023 reporting

To help signatories understand what they need to do to meet the minimum requirements, we have produced a guide to the minimum requirements indicators in the 2023 Reporting Framework. This provides guidance for signatories to identify and report on those indicators.

Further resources

The following resources are available to support investor signatories learn more about, meet and exceed the minimum requirements:

Why requirements were introduced

The PRI’s consultation on strengthening signatory accountability in September 2017 showed strong signatory support for using reporting and assessment data to delist signatories whose progress in implementing the Principles is not sufficient. View an overview of the consultation responses (PDF).

The increased accountability of the PRI as an organisation is one of the focus areas of our 10-year Blueprint for responsible investment.

When signatories do not meet these requirements

The PRI has committed to extensively engage with signatories identified as not meeting the minimum requirements, and to provide them with the support needed to implement necessary changes to meet them within a two-year engagement period. Signatories that do not meet the criteria based on their PRI reporting will be informed privately and delisting will only be as a last resort following unsuccessful engagement over the two-year period.

Delisting process

Signatory Accountability Rules

The Signatory Accountability Rules support the integrity of the PRI membership by setting out measures for minimum requirements. The purpose of the rules is to inform signatories of the minimum requirement criteria and the formal process for engagement and, as a last resort, delisting. The rules were approved by the board in December 2017.

Ongoing review of the minimum requirements

Background to the review

The PRI’s minimum requirements for investor membership have successfully been driving change since 2018, supporting hundreds of signatories to improve their practices over the two-year engagement period. To keep pace with a rapidly changing landscape, PRI is committed to reviewing the minimum requirements to ensure they remain fit-for-purpose.

In 2020, a formal review process began. This involved assessing the future applicability of the current requirements, setting out potential new minimum requirements to increase accountability, and reviewing our engagement process and Signatory Accountability Rules.

PRI sought signatory signatory feedback on the potential changes as part of the 2020 PRI strategy consultation. You can read about the proposed changes to the minimum requirements (PDF). Generally, signatories were supportive of the proposed changes and provided useful feedback for each of the potential new requirements.

Continued review to ensure delivery against signatory expectations

Following the 2021 reporting cycle, the review of the minimum requirements was put on hold while the PRI focused on improving the quality of the 2021 reporting dataset, delivering the 2021 reporting outputs and developing an improved 2023 Reporting Framework based on signatory feedback.

Recognising the significant recent growth in the PRI’s signatory base, meaning that many signatories were not included in the 2020 consultation and have not yet participated in a reporting cycle, the decision has been taken to continue the review of the minimum requirements into 2023. This will allow the PRI to account for signatory feedback and reporting data that more accurately reflects our current signatory base and broader market developments.

Continuing the review in 2023 will also allow us to determine the most suitable progression for the minimum requirements which effectively caters to our increasingly diverse signatory base and advances the broader mission of the PRI, following the PRI in a Changing World consultation. As the PRI has seen significant growth in its signatory base since the PRI strategy consultation and 2021 reporting cycle took place, taking into account more recent reporting data and a wider range of feedback will more accurately reflect our current signatory base and will help us to deliver more targeted and effective improvements to the minimum requirements.

While the review continues, the existing minimum requirements and processes will remain in place for the 2023 reporting cycle. Whilst we determine what shape the continued review will take, we are confident that the existing minimum requirements deliver appropriate accountability across our signatory base and remain important considerations for investors. We will update you on future developments of the review as it progresses.

Frequently asked questions

Who the requirements apply to

Do the requirements apply to all signatories?

The requirements apply to asset owner and investment manager signatories only and are reported on through the Investor Reporting Framework.

I am reporting voluntarily – do the requirements apply to me?

Signatories that complete their reporting during the first voluntary cycle and do not meet the minimum requirements of membership will be identified and informed. However, they will be given an additional year to meet the requirements, the equivalent to two mandatory reporting cycles.

Understanding the requirements

How have signatories been involved in developing the measures?

In 2016, we received five hundred signatory responses to our consultation on accountability and recognising diversity (PDF). We then conducted a more detailed consultation on minimum requirements and showcasing leadership (PDF) between August and October 2017 and held an interactive workshop at PRI In Person in Berlin to enable signatory input. In total, the PRI received input from over three hundred different organisations.

Why were these three minimum requirements chosen?

These requirements and indicators were selected because they are applicable to all types of signatories. Feedback also indicated that these were achievable within the two-year engagement period and an appropriate place to start for newer and less advanced signatories. The process is intended to help signatories progress through use of PRI resources and networks.

These requirements remain important first steps for investors new to ESG.

Why will signatories have two years to meet the requirements?

Following consultation, a two-year engagement period was indicated as an appropriate time for signatories to implement the requirements and have sufficient opportunity to meet them. As signatories do not have to report in their first year, this means that organisations will have been signatories for a minimum of three years before they would risk delisting for failure to meet the requirements.

Meeting the minimum requirements

How will the PRI support signatories who do not meet the requirements?

The PRI will confidentially inform all signatories that do not meet the requirements. Following this, an engagement plan will be agreed for the two-year period and signatories will be supported through the process with the appropriate resources.

How can I meet the first minimum requirement – Investment policy that covers the firm’s RI approach (PGS 1 and PSG 8)?

To meet the policy requirement, signatories must have an RI policy setting out the firm’s overall approach and/or formalised guidelines on E, S and G factors. The policy must cover more than 50% of AUM. Information on how we define an RI policy will be available in the explanatory notes of the indicators in the 2023 Reporting Framework. Guidance on how to draft RI policies and a list of publicly available ones can be found at the following links:

How can I meet the second minimum requirement – Oversight of RI implementation (PGS 11)?

To meet the oversight requirement, signatories must have senior-level oversight and accountability for RI implementation. Individuals with oversight roles are those with management or governance responsibility for ensuring that the organisation implements its policies and achieves its objectives and targets in relation to RI performance. “Senior level” includes the roles: board, trustees, senior executive-level staff, investment committees, heads of department and equivalent.

How can I meet the third minimum requirement – RI implementation (PGS 12)?

To meet the implementation requirement, signatories must have at least one person whose role includes responsibility for implementing responsible investment RI in their organisations – for example, through conducting ESG-related research, incorporating ESG issues into investment strategies and voting shareholdings, and engaging with companies and policy makers. This role can be covered by internal or external staff, does not have to be dedicated RI/ESG investment staff; and the person responsible does not have to allocate the majority of their time to RI/ESG activities

Does our RI policy have to be publicly available?

The first minimum requirement states that signatories must have an RI policy in place, but it does not require it to be publicly available. Nonetheless, we recommend that signatories choose to make relevant elements of their RI policy publicly available to promote transparency, as best practice. Signatories have the option to disclose links to their RI policies in indicator PGS 3 when reporting.

Delisting

Will the PRI publish a list of signatories that do not meet the requirements?

The PRI does not name the signatories that do not meet the minimum requirements during the two-year confidential engagement period. Signatories that are delisted at the end of the engagement period will be publicly disclosed on our website following board approval. It should be noted that the minimum requirements are based on responses to indicators that are made public as part of an organisation’s Transparency Report.

Will I be delisted if I do not meet the requirements?

Delisting will be a last resort if the two-year engagement period is unsuccessful and if the reasons for not meeting them are not deemed to be extenuating. Signatories can appeal the delisting decision.

Will my fees be refunded if I am delisted for not meeting the minimum requirements?

Signatories that are delisted for not meeting the minimum requirements will not have their fees reimbursed.

Can I be relisted after not meeting the minimum requirements?

Signatories that have been delisted and wish to relist will be required to wait one calendar year and then provide evidence that they meet the minimum requirements in place at that time. The grace year will not apply to relisting signatories. These signatories will be required to report in the next reporting cycle.

What happens if I revert to not meeting the minimum requirements?

Signatories that revert to not meeting the minimum requirements (including after any relisting) will be required to address the requirements in a one-year timeline. If the requirements have changed in the interim period, the usual two-year period will apply.

Future developments

Will the minimum requirements be strengthened in 2024?

With the continued review of the minimum requirements in 2023, our primary focus will be to ensure that future developments ensure progress in implementing the Principles, cater to our diverse signatory base and effectively deliver on the PRI’s mission. All future developments of the minimum requirements will be based on analysis of the latest data to determine how we may best achieve this.

We will provide further updates on the next steps of the review to all signatories as work progresses.

How is the PRI working to address accountability amongst its signatories if the minimum requirements are not being strengthened in 2023?

Accountability is one of the objectives outlined in the PRI’s Blueprint for Responsible Investment and remains a key focus for the continued development of reporting and assessment. Keeping the existing minimum requirements and continuing their review into 2023 mean that we are able to determine future developments that align with recent market trends, are reflective of our current signatory base, and able to best serve signatories and advance the mission of the PRI.

The minimum requirements, first introduced in 2018, have been demonstrably successful in driving change amongst our signatory base and ensuring that PRI signatories progress in their responsible investment journey. They remain an important step for investors that are new to ESG. This will continue in 2023, and signatories not meeting the requirements will be held to account.

The development of the Reporting Framework over time has also strengthened accountability amongst our signatory base through increased transparency on reported data, the introduction of indicators on confidence-building measures and assessment based on reported data. These are additional important means of ensuring that signatories demonstrate and progress their commitment to the Principles.