Minimum requirements for investor membership

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.

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. 

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:

• 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 (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.

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 are 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.

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 2024? 

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.