A mandatory public disclosure element is part of the accountability and transparency the PRI is pushing.
PRI signatories, through the secretariat, are working to create the world’s first global standard for reporting and assessment of responsible investment activity and capability. We are one step closer to achieving this following the completion of this year’s pilot of the new Reporting Framework. It is important to take stock of how it was received by signatories and consider what needs to happen next to ensure it becomes an effective tool, and ultimately the global standard. We couldn’t agree more with the main sentiment expressed in Responsible Investor’s recent editorial. Signing up to the Principles for Responsible Investment is only the first step to becoming a responsible investor. Without meaningful reporting and transparency, it is impossible for the investment community and those whose money it manages to gauge the extent to which signatories, and the PRI Initiative as a whole, is progressing in implementing the Principles and responsible investment in general. Responsible Investor is not alone in calling for higher levels of accountability and transparency. PRI signatories have also expressed demand for it, recognising that the Initiative is uniquely placed to gather this information and support the industry in moving forward. Since 2007, the PRI’s reporting and assessment process has been the key mechanism through which signatories report on progress and demonstrate to their clients, beneficiaries and other stakeholders how they take ESG issues into account in their investment and ownership processes. After five years, it became clear that significant changes were needed if it was to become the industry standard and deliver the additional accountability and transparency that we all agree are required.
One of the key changes in the new framework is a mandatory transparency element. While many signatories voluntarily disclosed their responses to the previous survey, the process had no disclosure requirements, and given Principle 6: “We will each report on our activities and progress towards implementing the Principles”, the PRI Board felt that this was untenable. It first proposed in 2009 at PRI in Person in Sydney that disclosure by signatories of their activities under the Principles should become a condition of being a signatory. This required a rethink of what signatories should report, and how the indicators should be structured. In an open consultation in 2011, signatories and other stakeholders also expressed a clear preference to move away from an assessment-focused framework towards a reporting-focused framework (the responses to which could be assessed). Part of this new framework would be designed for public reporting, and deliver multiple outputs, such as an individual ‘RI Report’ for each signatory, the aggregate ‘Report on Progress’ and a private assessment report for learning purposes and dialogue between client and manager. Drawing on experience over the last five years, and with a mandate from the PRI Advisory Council, a group of signatory representatives, facilitated by the secretariat, embarked on a major rebuild. We conducted the most extensive consultation we have ever undertaken, culminating in the online pilot earlier this year. More than 350 signatories participated and gave detailed feedback. The process was guided by two key signatory committees: the Reporting Technical Committee (focusing on the technical aspects) and the Reporting and Assessment Advisory Committee (focusing on the policy aspects). More than
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