Responsible Investor

UN PRI cuts its teeth with first public investor campaign

Supporters say boost to Global Compact points the way to more sophisticated collaborations.

Signatories to the United Nations Principles for Responsible Investment (UNPRI) got their first taste of public action earlier this month when investors representing $2.13 trillion in assets, announced they were targeting companies paying lip service to human rights and labour issues as part of their commitment to the UN Global Compact.
Twenty of the world’s largest institutional investors from 10 countries joined the campaign, which was led by Morley, the UK asset manager. Significantly, it was the first overt investor collaboration to be organised via the UN PRI Clearing House, the private intranet website run by the PRI where investors can pool information and resources and sign up for powerful collaborations. Supporters of the PRI say such actions could become more sophisticated and start lobbying companies that haven’t signed up to international standards. The Global Compact pressure campaign was launched because of frustration among investors that a large number of corporate signatories were failing to report on progress in adopting its ten action principles. The Global Compact was launched in 2000 by Kofi Annan, former UN general secretary. Its corporate commitments range from

upholding union rights to the abolition of child labour. Investors say they feared companies adhering positively to the Compact were becoming frustrated at others taking a “free-ride”: vaunting membership but failing to deliver on action. Companies listed as overdue in reporting progress on the Compact include Standard Chartered, ArcelorMittal and Bouyges Telecom in France. In total, the investors wrote to chief executive officers of 103 companies in more than 30 different countries. The letter called on laggard companies to improve performance in adopting the Global Compact while praising others that had recorded ‘notable’ progress under the UN’s rating criteria. Of the companies, 30 were deemed as ‘non-communicating’ on progress by the UN, 48 were ‘inactive’ and 25 were singled out for ‘notable’ progress. Eight of the companies contacted were subsidiaries of larger groups where investors are urging the parent company to sign up to the Compact.
Steve Waygood, head of engagement at Morley, who also sits on the UN PRI Clearing House advisory committee, says the campaign is an indication of the future potential of the Clearing House mechanism as a cost effective means of large scale investor engagement: “The

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