Principles for Responsible Investment (PRI)

Description of Characteristics:

• Investor-Led: The PRI is the world’s leading proponent of responsible investment. It works to understand the investment implications of environmental, social and governance (ESG) factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions.  
• Voluntary and Aspirational: The PRI is a voluntary network of investors who commit to incorporating ESG factors into their investment decision-making. The six Principles provide a framework for responsible investment, but they are not mandatory or legally binding.
• Focus on Long-Term Value Creation: The PRI believes that ESG factors can contribute to long-term value creation for investors and beneficiaries.
• Collaborative: The PRI facilitates collaboration and knowledge sharing among investors to advance responsible investment practices.
• Evolving: The PRI regularly updates its guidance and tools to reflect emerging ESG trends and best practices.

Specific Criteria:

• Six Principles:
  1. We will incorporate ESG issues into investment analysis and decision-making processes.
  2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
  3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
  4. We will promote acceptance and implementation of the Principles within the investment industry.
  5. We will work together to enhance our effectiveness in implementing the Principles.
  6. We will each report on our activities and progress towards implementing the Principles.  
• Reporting Framework: The PRI Reporting Framework guides investors on how to report on their responsible investment activities.
• Assessment: The PRI conducts an annual assessment of its signatories’ implementation of the Principles.

Reporting Principles:

• Transparency: Signatories are expected to be transparent about their responsible investment activities and progress towards implementing the Principles.
• Accountability: Signatories are accountable for their actions and decisions relating to responsible investment.
• Continuous Improvement: Signatories are expected to continuously improve their responsible investment practices.

Reporting Process:

1. Sign the Principles: Investors sign up to the PRI and commit to implementing the six Principles.
2. Complete the PRI Reporting Framework: Signatories annually complete the PRI Reporting Framework, which assesses their progress on implementing the Principles.
3. Participate in the PRI Assessment: Signatories participate in the PRI’s annual assessment process.

Connections to Other Frameworks:

• Complementary to other ESG Frameworks: The PRI encourages signatories to use other ESG frameworks and standards, such as the GRI Standards and SASB Standards, to support their responsible investment activities.
• Alignment with the SDGs: The PRI encourages signatories to consider the SDGs in their investment strategies.

Challenges:

• Voluntary Nature: The PRI relies on the voluntary commitment of investors to implement the Principles.
• Comparability: The flexibility of the PRI Reporting Framework can make it challenging to compare the performance of different signatories.
• Focus on Investors: The PRI is primarily focused on investors, limiting its direct applicability to other types of organizations.

Compliance Guidance:

• PRI Reporting Framework Guidance: Provides detailed instructions on how to complete the PRI Reporting Framework.
• PRI Academy: Offers training courses and resources on responsible investment.
• PRI Collaboration Platform: Facilitates knowledge sharing and collaboration among signatories.

Usability Evaluation:

• Level of Global Adoption: Widely used by investors globally, with over 5,000 signatories representing trillions of dollars in assets under management.
• Ease of Use: Relatively straightforward for investors familiar with ESG principles, but the reporting requirements can be extensive.
• Focus Areas: Focuses on integrating ESG considerations into investment decision-making and ownership practices.
• Data Availability: Data availability can vary depending on the investment strategy and asset class.

SyncFrame Compatibility:

• Complementary Framework: SyncFrame can be used alongside the PRI to provide a more comprehensive assessment of an organization’s ESG performance.
• Investor Focus: SyncFrame’s focus on impact measurement and transparency aligns well with the PRI’s investor-centric approach.
• Stakeholder Engagement: SyncFrame’s emphasis on stakeholder engagement complements the PRI’s focus on active ownership.

Reference Links/Resources:

• PRI website: https://www.unpri.org/