Stockholm (NordSIP) – The UN PRI (Principles for Responsible Investment) has initiated procedures to delist up to possibly 10% of signatories to PRI who are failing to live up their commitments to the PRI, or to meet them at the minimal level. The offenders will be given two years to comply before being de-listed by the PRI.
“You pay your fees, you report, but you’re not doing anything,” said PRI Chairman Martin Skancke on the harsher charges. Previous reasons for expulsion from the PRI have been not paying dues or failing to file annual reports on ESG compliance, but from this point on this variation of ‘greenwashing’ by belonging to the PRI while doing nothing will also count.
Skancke imputed “mixed motives” to investment managers who have signed up to the PRI but failed to make any significant changes. “The large U.S. investment managers are taking this very seriously, but I think maybe more because they want to attract European institutional investors who care about this than the US institutional investors who in many cases care not so much,” Skancke said.
While the companies in question have not been publicly identified, they have been notified by the UN PRI as to their potential de-listing in the hope that they will change their ways in the interim. “This is important for the legitimacy of the PRI,” Skancke said. It is mainly U.S. portfolio managers who are under scrutiny.
Asset managers must invest at least 50% of their portfolio according to PRI responsible investment guidelines to comply with their PRI membership. Asset managers must have designated personnel responsible for responsible investment, while formal guidelines on at least one aspect of ESG must be available.
Skancke suggested not all asset owners are comfortable with the transparency requirements involved in PRI membership. On the other hand, the PRI plans on rewarding positive responsible investment through a new annual award ceremony to take place next year in order to highlight progress on behalf of those asset managers who are fulfilling their duties.