The Principles for Responsible Investment should look at making more use of its links with fellow UN-supported body the Global Compact to improve investor-corporate engagement, suggests PRI Chairman Martin Skancke.
Skancke, who is an ex-officio board member at the Global Compact, said the Global Compact’s existing standards for corporates could be a useful framework for engagement between investors and companies.
The Global Compact, formed in 2000, is the UN’s voluntary business responsibility platform and its 10 principles cover the areas of human rights, labour, the environment and anti-corruption.
It is chaired by Secretary General Ban Ki-moon and its Vice Chair is Sir Mark Moody-Stuart, the former Royal Dutch Shell chief who chairs Hermes Equity Ownership Services, the engagement arm of the BT Pension Fund-owned fund firm Hermes.
The PRI initiative itself was formed in partnership with the Global Compact and the UN Environment Programme Finance Initiative (UNEP FI) but Skancke feels the potential engagement synergies between the PRI and the Global Compact have been underplayed.The PRI’s relationship with the Global Compact relationship is “very important” he told Responsible Investor. He also pondered the role investors via the PRI can have in providing “good input” into the Global Compact’s standards for business conduct.
The Global Compact is a founding member of the UN’s Sustainable Stock Exchanges initiative with the PRI, UNEP-FI and the UN Conference on Trade and Development (UNCTAD).
The PRI already engages with non-reporting Global Compact signatories and has a new initiative in place focusing on leaders and laggards. The two organisations have previously collaborated on an initiative called ESG Investor Briefings, where companies present to investors.
Skancke also said that the PRI is readying an investor project on corporate tax issues, noting that the “signatories came to us”. This would appear to fit into a broader action by investors on the issue, as identified recently by RI here.