Principles for Responsible Investment creates draft model for kicking out signatories

Signatories who don’t show progress will be put on a watch list

The Principles for Responsible Investment has created a draft model for kicking out signatories that do not “show progress”, it has told RI.

The UN-backed body has been under increasing pressure to axe members that are seen to be falling short of wider market expectations around responsible investment. Last year, it announced it would create a mechanism to ‘delist’ signatories if they are lagging in this respect. The move comes as the PRI outlines its nine priority areas over the next decade in its new ‘blueprint’. The nine include an effort to “showcase leadership and increase accountability”.

Alongside launching awards and league tables to recognize leaders in the arena, the PRI says it will also bolster accountability by defining “a minimum standard of activities that signatories must achieve”. As part of this, it will delist those who don’t show progress in achieve or aligning with the six Principles.“We have put a model together for this process, which will include putting signatories who are not showing progress on a watch list and then giving them time to improve.  If improvement is not made, then they will be delisted,” explained a spokeswoman for the PRI, adding: “We think that by having a delisting criteria, we will encourage better practices.”

The formal model for delisting signatories is due to be discussed at a forthcoming PRI board meeting. Following that, there will be a consultation with signatories on the proposals before the model is approved. The spokeswoman said a final model is expected by December.

Other priority areas for the PRI over the next ten years are: “empowering asset owners; supporting investors to incorporate ESG issues in their investments; fostering a community of active owners; convening and educating responsible investors; challenging barriers to a sustainable financial system; driving meaningful data throughout markets; championing climate action; and enabling real-world impact aligned with the SDGs.