Ethical Performance
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PRI surge gives boost to responsible investment overhaul

January 2011

The number of signatories to the United Nations-backed Principles for Responsible Investment (PRI) has jumped  by more than 30 per cent in a year, to 808.

The UN claims the surge reflects increasing recognition by institutional investors worldwide of the need to consider environmental, social and corporate governance (ESG) issues.  

However, two signatories - Axiom Properties and Carnbrea & Co, both Australian - have recently been de-listed because they failed to participate in the PRI assessment survey, which requires signatory organizations to say how they are implementing responsible investment principles.

Completing the survey every year is mandatory for asset owner and investment manager signatories after a one-year grace period. Of the 356 signatories required to complete the survey this year, 97 per cent complied.  

Signatories are also encouraged, but not required, to publish their survey responses in full, and this year 166, or 40 per cent of respondents, did so, up from 70 last year (25 per cent) and 35 in 2008 (22 per cent).

In addition to the two de-listed companies, eight others voluntarily withdrew during the year - Apostle Asset Management (Australia); Forma Futura Invest (Switzerland); Natural Investments (US); Nevastar Finance (UK); Principle Capital Partners (Switzerland); Stock Rate Asset Management (Denmark); Sutterlüty Investment Management (Austria); and Systematic Absolute Return (Switzerland).

The PRI's 2010 end-of-year report shows signatories conducted more than 4000 CSR engagements with companies, and that the proportion of asset owners involved in dialogue with regulators on CSR issues rose to 85 per cent.

About 90 per cent said they had been involved in formal or informal collaboration with other investors on ESG issues.

James Gifford, the PRI executive director, said: 'For many investors, this is the first time they have systematically collected data on responsible investment both from within their organizations as well as from outsourced managers and service providers.

'The real highlight is that 40 per cent of respondents opted to publish their responses in full online, as that represents a real and significant increase in investor transparency on responsible investment activities.

'Every large, world-class listed company is now monitoring and reporting on its ESG performance, and so too are an increasing number of investors.'

The value of the assets under management of PRI signatories stands at $22trillion (£14.1tn, €16.7tn), more than ten per cent of the total value of global capital markets, and signatories are now drawn from 45 countries.

Measures on the de-listing of signatories were introduced in 2009 to remove investors that appear to be doing little to observe the principles. De-listed organizations will be welcomed back provided they undertake to fulfil their obligations.

Principles for Responsible Investment | Global | SRI

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