PRI may impose stricter requirements

Signatories to the United Nations Principles for Responsible Investment (PRI) may have to report in more detail – and in public – on how they observe the principles.

The PRI’s governing body is considering the new requirements as part of a consultation examining how it can stop investors from signing up to the principles and then doing nothing.

At present PRI signatories must participate in an annual assessment survey requiring them to say how they are implementing responsible investment principles. They are encouraged to make the responses public, but not as a compulsory requirement.

If agreed, the new regime is likely to demand a more detailed annual public disclosure of signatories’ activities, much like the mandatory communications on progress (COPs) that must be filed by supporters of the UN’s Global Compact.

James Gifford, the PRI’s executive director, said: ‘The PRI board believes signatories must be transparent about the actions they are taking. We won’t expect signatories to expose commercially sensitive activities, but I think we could see something a bit like the Global Compact’s COP.’

He said it was unreasonable for investors to expect companies to be more transparent if they themselves kept quiet about what they were doing. Last year PRI signatories sought explanations from 86 large companies that had failed to submit a COP to the Global Compact. If the PRI follows the Global Compact’s lead, signatories failing to comply with its new requirement will probably be de-listed.

PRI signatories manage more than $2.1trillion (£1.31tn, €1.56tn) of assets worldwide.