PRI pushes for simpler reporting standards and more targeted support

The UN-backed Principles for Responsible Investment (PRI) has launched a consultation process to create new best practices for investors and asset managers.

In what the global industry group calls a "step-by-step journey", it is asking its signatories to give feedback with regards to responsible investment methods.

Two key pillars take centre stage: more simplified, easier-to-adhere to reporting requirements, as well as more targeted support for investors and managers as they sharpen their responsible investment strategies.

Furthermore, the PRI wants to clarify the different roles that responsible investors have in the global sustainable financial ecosystem.

The guidance will not be mandatory as the group stressed any guidelines will be voluntary to adopt.

Alternative models

The PRI proposes two alternative models to structure the what the group calls its 'Progression Pathways.' 

The first is centred around investor purpose, clarifying the actual objectives of investors’ responsible investment approaches. 

"This could include focusing on incorporating environmental, social and governance risks and opportunities, and actively addressing the drivers of financially material sustainability risks," the PRI explained.

The second looks at the specific sustainability issues that investors are prioritising in their practices. Example areas include climate change, human rights, or biodiversity. 

"During the co-design process with signatories, one of these two models, or a combination of both, will provide the basis for the new Progression Pathways," the PRI said.

Workshops

In order to collect industry-wide feedback, the PRI plans to organise a range of workshops to discuss different models and proposals.

David Atkin, CEO of the PRI, stressed that "the nature of what it means to be a responsible investor has fundamentally changed" since the PRI's inception in 2006.

"Differences in the intended outcomes of responsible investment practices have become more apparent, creating risks of misaligned expectations and making progress more difficult," he noted.

Moreover, "signatories should not feel boxed in, thinking that there is a one-size-fits-all approach", Atkin stressed.

He expects the guidance to "empower" the PRI to develop targeted guidance, tools, reporting and accountability standards, while fostering communities of shared practice.

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