PRI launches ESG broker research database

Project kicks off merger with the Enhanced Analytics Initiative.

by Hugh Wheelan | December 4th, 2008

Investor signatories to the United Nations Principles for Responsible Investment (UNPRI) will soon be able to access what should quickly become the largest independent database of environmental, social and governance (ESG) reports produced by sell-side brokerage research houses, as the first step of the recently announced merger between the UNPRI and the Enhanced Analytics Initiative (EAI).
The PRI said the database, which will be free to signatories, is expected to be fully operational in spring 2009 following a test period by investors. The database will permit approved research providers such as banks and fund managers to catalogue reports that take a practical, long-term investment view and explicitly integrate material ESG issues into financial analysis. The PRI said the database would “incentivise” banks to produce so-called ‘extra-financial analysis’ via the lure of archiving it for promotion to the PRI’s membership, which now represents assets of about $18 trillion. PRI signatories have told the initiative that one of the biggest barriers to the growth of ESG integration into investment is the availability of good quality research. Investors will be able to search the new database by ESG theme, sector and region. James Gifford, executive director of the PRI, said: “The continued generation and availability of quality, integrated ESG research is critical to effecting a
lasting change in the industry. This database will have clear benefits for both research providers and research consumers.” Marcel Jeucken, head of responsible investment at PGGM Investments, a founding member of EAI and signatory of PRI, said: “EAI members view the new PRI database as the logical next step to further the EAI’s mission to incentivise better research for long-term investors. The EAI’s pioneering work over the past four years has helped to successfully incubate this kind of research, as detailed in the initiative’s final report, ‘Research centre stage’, which is released today. Its transition into the PRI framework will give enhanced research a truly global dimension.” The PRI has established an independent working group who will moderate the content from research providers to ensure eligibility for posting. Prior to its merger with the PRI, the EAI, which numbered 25 pension funds, asset managers and brokerage arms of investment banks, carried out a bi-annual evaluation of investment research providers, which identified a recommended shortlist of those producing high-quality extra-financial research to which buy-side members could direct a portion of their research commissions. Investors interested in participating in the pilot phase of the PRI research database should contact ryan.pollice@unpri.org