Signatory input
The PRI’s mission sets out our belief that an economically efficient, sustainable global financial system is a necessity for long-term value creation. As part of our Blueprint for Responsible Investment we have committed to address the barriers to a sustainable financial system – our Sustainable Financial System (SFS) work.
Trustee boards (and the boards of all our asset owner signatories) occupy an important place in the investment chain and their decisions ultimately shape actions taken further down the chain. Trustee boards and their “readiness” is one of our first SFS projects. The Committee will work with the PRI Executive to examine the dialogue taking place in investors’ boards and the decision-making frameworks they use, and develop tools and practical ways that boards can incorporate system-level outcomes to their duties and further integrate ESG issues.
Objectives
The PRI has started to analyse trustee system-level awareness and assess the practice of various trustee segments. Our intention is to target asset owner boards who are good at ESG integration, but need help framing how to address system-level outcomes and following through on their practice. We will develop a framework that will ensure system consequences are discussed in board meetings which could include looking at liability risks for trustees and regulatory barriers that stop trustees from considering system-level issues. We will prepare the tools for trustees to implement such a framework – including trustee education, diagnostic tools, explicit decision making frameworks and clear linkages to the implementation of tools.
Signatory input
We are looking for signatories to help with the project by providing informal advice, acting as a sounding board to test ideas and help us connect with Trustees who may be interested in using new tools. The role would include helping the PRI Executive to:
- examine the incentives that will encourage boards to consider system-level outcomes;
- review and advise on the practices and tools necessary to support board consideration of system-level outcomes to their duties;
- help identify boards where there is a high degree of ESG awareness, but limited system awareness and codify this into their investment approach (mission and beliefs);
- facilitate the piloting of tools with trustee boards.
The role would likely involve:
- guidance/feedback to the Executive on relevant trustee and board insights via phone or email – this may include providing advice/feedback on outputs such as publications, toolkits and the work stream strategy;
- outreach with peers on behalf of the PRI.
