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 delisted.
Update on reporting
The next reporting cycle will start in 2023. As a result, the announcement and implementation of further minimum requirements will also be postponed.
The minimum requirements
These are the three minimum requirements existing and future asset owner and investment manager signatories must meet:
|Minimum requirement||Strategy and Governance (SG) 2020 module indicator||Investment & Stewardship Policy (ISP) 2021 module indicator|
|RI policy, setting out:
||SG 01||ISP 1
|Senior-level oversight of RI||SG 07||ISP 6|
|Internal/external staff implementing RI||SG 07||ISP 7|
Watch the Accountability in the 2021 Reporting Cycle webinar to learn more about the minimum requirements.
Why these 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.
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.
Increased minimum requirements
In the PRI strategy consultation, we proposed potential new minimum requirements and an amendment to the timeline to meet the requirements – see the proposed changes we consulted on below. Generally, signatories were supportive of the proposal presented and provided useful feedback for each of the proposed new requirements.
Not all of the proposed minimum requirements will be put in place – we have been analysing signatory feedback and using data from the 2021 reporting cycle to assess the suitability of each proposal. The final set of strengthened minimum requirements will be announced following Board approval. The minimum requirements review is currently delayed due to the postponement of the next reporting cycle to 2023. Read more.
As part of the PRI strategy consultation, we proposed increasing the minimum requirements to strengthen accountability. We included several new requirements in the consultation and sought feedback from signatories so that we could assess their suitability.
Analysis and modelling
Since the consultation, we have been analysing signatory feedback on the proposed new minimum requirements and modelling each requirement based on the 2021 reporting cycle data to determine which ones to implement.
The PRI will make a final recommendation to the Board on which new minimum requirements should be implemented. Subject to approval, the PRI will announce the selected set of strengthened minimum requirements.
Implementation of new minimum requirements
Changes proposed in the PRI Strategy consultation under consideration
1. A shorter timeline, of one year engagement, before delisting
Once the strengthened minimum requirements have been announced, signatories will have at least 20 months to implement any necessary changes to meet them, equivalent to two reporting opportunities. Support will be provided during the one-year engagement period for those signatories that do not meet the minimum requirements in the 2022 reporting cycle and beyond.
2. Increased minimum requirements
We propose strengthening the current minimum requirements to further increase signatory accountability. The new requirements under consideration are presented below.
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. Service provider signatories reported for the first time on a mandatory basis in 2018 – another important step forwards for the PRI’s accountability.
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
Why has the PRI introduced accountability measures?
In 2016, the PRI conducted an extensive stakeholder consultation on accountability and recognising diversity. It showed a strong endorsement of the PRI’s ambition to increase transparency, accountability and leadership among its signatories.
The Blueprint for responsible investment lays out the PRI’s ambitions and goals for the 10 years ahead; strengthening accountability and showcasing leadership are at its core.
What are the aims of the minimum requirements initiative?
The main objectives are:
- engaging signatories that have been failing to implement the Principles;
- delisting, as a last resort, signatories who are not committed to the Principles;
- helping signatories committed to the Principles but not highly engaged with the PRI.
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. We then conducted a more detailed consultation on minimum requirements and showcasing leadership 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 network.
Why will signatories have two years to meet the requirements?
Following consultation, a two-year engagement period felt 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 will mean that organisations will have been signatories for a minimum of three years before they have 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 (ISP 1, ISP 1.1 and ISP 3)?
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 2021 Reporting Framework (until the launch, this information can be found in the explanatory notes of the Strategy & Governance module in the 2020 Reporting Framework) . Guidance on how to draft RI policies and a list of publicly available ones can be found at the following links:
- RI policy snapshot report
- An introduction to responsible investment: policy, structure and process
- Investment policy: process & practice
- Crafting an investment strategy
How can I meet the second minimum requirement – Oversight of RI implementation (ISP 6)?
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: chief level staff, head of department, CEO, CIO, investment committee and board members or trustees.
How can I meet the third minimum requirement – RI implementation (ISP 7)?
To meet the implementation requirement, signatories must have staff implementing 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, many PRI signatories choose to disclose their RI policies.
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 there are deemed no extenuating circumstances. Signatories will be able to appeal the delisting decision.
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.
Proposed minimum requirements
Will all proposed minimum requirements be implemented?
No, the minimum requirements listed above are subject to change. The board will review the list of potential requirements and decide which ones will be implemented, removed or need changing.
The reporting process
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Minimum requirements for investor membership