Impact investing has struggled to date because the industry lacks a universal standard of measuring positive impact, which is why it is time for the UN Principles for Responsible Investment to take a tougher stance on companies failing to adhere to its guidelines.
The PRI, which was founded in 2005 and monitors firms based on six key principles designed to embed ESG considerations, has taken some steps to ensure its criteria are being implemented. It has said companies that fail to meet a set of ‘minimum requirements’ by 2020, following extensive engagement with the PRI, would result in delisting.
In addition, it was recently reported that the PRI is carefully monitoring one in 10 of the signatories to its responsible investment initiative after an annual audit demonstrated they were failing to live up to their promised ESG attributes. It said it has plans to put 185 of its 1,967 signatories on a watchlist.