We have received our latest PRI Assessment and are delighted to have achieved 5-star ratings in seven out of the eight modules and 4 stars in the remaining module. In all categories we performed above median.
What are the six PRI principles for Responsible Investment?
The six Principles for Responsible Investment are a voluntary and aspirational set of investment principles that offer a menu of possible actions for incorporating ESG issues into investment practice. The PRI produce an annual assessment of asset managers based on implementation of these principles. In implementing them, signatories contribute to developing a more sustainable global financial system.
Asset managers join the PRI voluntarily. As of June 2022, there are over 5,000 signatories representing US$121tn of AUM.
- Principle 1: Incorporate ESG issues into investment analysis and decision-making processes.
- Principle 2: Active owners and incorporate ESG issues into our ownership policies and practices.
- Principle 3: Seek disclosure on ESG issues by entities.
- Principle 4: Promote the Principles within the investment industry.
- Principle 5: Collaboration - work together to enhance our effectiveness
- Principle 6: Report on our activities.
These principles are well aligned with our Stewardship Principles and Ownership Discipline and we have comfortably demonstrated our alignment through our commitment to responsible investment. For example, as a founding signatory to the Net Zero Asset Managers Initiative, we play our part in supporting the energy transition, further amplifying the centrality of Paris-aligned accounting. We remain focused on promoting reliable accounting and robustly independent audits. Additionally, we set a vision for responsible technology, and we continue to expand our scrutiny of companies’ treatment of staff and suppliers.
In 2021, the PRI increased the depth of the areas assessed and also required a Senior Leadership Statement, to demonstrate senior management oversight of the approach and achievements on responsible investment. Other key changes are listed below:
Key changes in 2021
Policy & Governance
- A focus on which responsible investment policy components signatories have and what percentage of their AUM these cover.
- A focus on how responsible investment objectives and variable compensation are linked within the governance structure of organisations.
Reflects a broader definition of stewardship, incorporating tools beyond corporate engagement and proxy voting in listed equity.
- Assesses how stewardship is addressed in the organisation and how it might differ in practice depending on asset class.
- Includes a section on policy maker engagement and how signatories manage potential conflicts of interest in their lobbying activities.
- Anchored around the 11 TCFD recommendations
An increased focus on the incorporation of ESG factors into materiality analysis, portfolio construction, asset valuation, credit assessment, risk management and investment decision making.
- Specific indicators on private debt, securitised products, passive and thematic fixed income.
- A new indicator on the implications of disclosing ESG screens to clients and beneficiaries.
- A new question on engagement for sovereign bond investors as part of stewardship.
- A focus on understanding whether there are robust measures in place to ensure screening is performed as intended.
- A focus on encouraging more transparency in the passives industry.
- New indicators on transparency and communication to clients and beneficiaries on responsible investment practices.