The UN-supported Principles for Responsible Investment (PRI) is now asking signatories to back up signatures with votes and accelerated progress on climate and human rights. The organization is seeking to head off concerns about “greenwashing” and will institute minimum voting and policy requirements for signatory firms.
The organization released its
PRI Strategic Plan 2021-2024 in April. The standards are expected to be formally announced in July 2021 and required reporting will begin in the first quarter of 2021. Signatories that do not meet the minimum requirements will be granted a one-year “engagement window” to comply; if they still don’t meet the minimum requirements by mid-2022, PRI will “de-list” them. The new requirements include:
- A publicly disclosed Responsible Investing Policy covering at least 90% of assets under management.
- The policy must incorporate ESG in all asset classes in which at least US $10 billion is invested, or that make up 10%+ of assets under management.
- The policy must require engagement and voting in listed equity.
- With regard to signatory reports, there must be internal verification, C-level sign-off and internal and external audits of data.
The guidelines highlight that priority issues include climate change mitigation and human rights (including diversity, equity, and inclusion). However, the update does not lay out specific guidelines on when a company may trigger a concern or prescribe how signatories must vote. Currently, 628 US investment managers are signatories and include many of the largest institutional investors such as BlackRock, JP Morgan, and Vanguard.
