Principles for Responsible Investment (PRI)

General

About PRI

There is a growing view among investment professionals that environmental, social and corporate governance (ESG) issues can affect the performance of investment portfolios. Investors fulfilling their fiduciary (or equivalent) duty therefore need to give appropriate consideration to these issues, but to date have lacked a framework for doing so. The Principles for Responsible Investment provide this framework.

The Principles are voluntary and aspirational. They are not prescriptive, but instead provide a menu of possible actions for incorporating ESG issues into mainstream investment decision-making and ownership practices.

Signing represents a very real commitment to the Principles, demonstrating support from the top-level leadership of the whole investment business. And applying the Principles should not only lead to better long-term financial returns but also a closer alignment between the objectives of institutional investors and those of society at large.

The Principles

PRI Signatories:As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social, and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time). We also recognise that applying these Principles may better align investors with broader objectives of society. Therefore, where consistent with our fiduciary responsibilities, we commit to the following:

1. We will incorporate ESG issues into investment analysis and decision-making processes.2. We will be active owners and incorporate ESG issues into our ownership policies and practices.3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.4. We will promote acceptance and implementation of the Principles within the investment industry.4. We will work together to enhance our effectiveness in implementing the Principles.5. We will each report on our activities and progress towards implementing the Principles.

The Principles for Responsible Investment were developed by an international group of institutional investors reflecting the increasing relevance of environmental, social and corporate governance issues to investment practices. The process was convened by the United Nations Secretary-General.

In signing the Principles, we as investors publicly commit to adopt and implement them, where consistent with our fiduciary responsibilities. We also commit to evaluate the effectiveness and improve the content of the Principles over time. We believe this will improve our ability to meet commitments to beneficiaries as well as better align our investment activities with the broader interests of society.

We encourage other investors to adopt the Principles.

Developing the Principles for Responsible Investment

In early 2005 the United Nations Secretary-General invited a group of the world’s largest institutional investors to join a process to develop the Principles for Responsible Investment (PRI). Individuals representing 20 institutional investors from 12 countries agreed to participate in the Investor Group. The Group accepted ownership of the Principles, and had the freedom to develop them as they saw fit.

The Group was supported by a 70-person multi-stakeholder group of experts from the investment industry, intergovernmental and governmental organizations, civil society and academia. The process, conducted between April 2005 and January 2006 involved a total of five days of face-to-face deliberations by the investors and four days by the experts, with hundreds of hours of follow-up activity. The Principles for Responsible Investment emerged as a result of these meetings.

The process was coordinated by the United Nations Environment Programme Finance Initiative (UNEP FI) and the UN Global Compact. The PRI reflects the core values of the group of large investors whose investment horizon is generally long, and whose portfolios are often highly diversified. However, the Principles are open to all institutional investors, investment managers and professional service partners to support.

Following the launch of the Principles, Phase 2 of the process will promote adoption of the Principles by additional investors, provide comprehensive resources to assist investors in implementing the Principles and actions, and facilitate collaboration among signatories.

PRI Emerging Markets and Developing Countries Investment Project

Description

In partnership with the Swedish International Development Agency, UNEP FI is leading a two year project to promote the PRI in emerging markets and developing countries. This project has two main limbs. First, it will promote local investor adoption and implementation of the Principles. It will support institutional investors in these markets to better understand ESG issues and the commitments outlined in the Principles. Second, it will coordinate shareholder engagement by PRI signatories – from developed and emerging markets – with global and local companies operating in developing countries to encourage responsible business practices. It will also seek to address systemic problems constraining responsible investment through policy dialogue.

Project Activities and Themes

1. Promoting the PRI and building capacity among emerging market institutional investors 2. Developing and disseminating ESG research, analysis and benchmarking 3. Coordinating collaborative investor engagement on ESG issues to encourage responsible business practice in emerging markets and developing countries 4. Identifying and addressing systemic constraints to responsible investment in these markets