The Principles for Responsible Investment (PRI) has kicked out five of its members for failing to meet its “minimum requirements”, following two years of engagement.
BPE, the private banking arm of France’s La Banque Postale, is the largest asset manager member to be ousted in the first-of-its-kind action by the UN-backed body, which has been under pressure in recent years to be tougher on signatories.
Fellow French investor Delta Alternative Management was also delisted, alongside Indonesian-based manager Corfina Capital and US house Primary Wave IP Investment Management.
The only asset owner to be delisted was Dutch trade union Stichting Gemeenschappelijk Beleggingsfonds FNV.
BPE’s parent, Groupe La Banque Postale, describes its business model as “unique, solid, responsible and sustainable” on its website, saying it manages €97.25bn with ESG integrated.
The PRI introduced its “not particularly challenging” minimum requirements in 2018 and identified 165 members in breach of them at that time.
Fiona Reynolds, CEO at the PRI, told RI that it was the signatories themselves that called for the introduction of minimum requirements to “lift accountability”.
The standards require members to have a responsible investing policy that covers the majority of their assets and dedicated staff assigned to implement and oversee it.
Reynolds said that while it is “disappointing” to see delistings, the process had also prompted a number of signatories that were lagging behind to catch up – 92% of those engaged made the requisite changes.
23 signatories opted to delist themselves or were delisted for other reasons, such as not submitting their annual report, the PRI also revealed.
Next month, the PRI will consult again with members on the minimum requirements to ensure that they “remain fit for purpose”.
But Reynolds told RI that signatories may have just one year to meet minimum standards in the future. She added that the PRI had considered differentiating minimum requirements based on how long signatories have been members, but said that this is unlikely to come in next year.
Reynold added that any future differentiation might also consider the different regulatory regimes members are operating in, and contrasted the regulatory work in Europe to that of the US.
The PRI is also currently preparing to launch its new reporting framework for signatories in January, which is designed to be both more “streamlined and rigorous, providing an increasingly challenging benchmark to achieve the highest scores.”