PRI unveils details of ambitious plan to improve signatory accountability

Plan could include gold, silver and bronze ‘tiers’ and ejection for wayward members

The Principles for Responsible Investment (PRI) has unveiled its ambitious plan to improve accountability among signatories, including establishing “gold, silver and bronze” rankings, delisting wayward members and giving newer ones more time to understand and implement the principles.

As reported, PRI European Network Head Dustin Neuneyer told a conference in Frankfurt last month that the initiative was planning a ranking system. Now, in a new consultation paper for signatories, the PRI expands on Neuneyer’s comments. To improve accountability, it suggests either publishing on its website progress reports from signatories or if they are to remain confidential, encouraging them to meet gold, silver and bronze standards, or “tiers.”

It said: “Each tier could have different reporting requirements and disclosure obligations. For inclusion in the gold tier, signatories may have to report on all voluntary indicators and all asset classes where they hold more than 2% of their assets.”

Potential changes to the PRI’s six Principles are not part of this consultation. The PRI’s signatory base includes investors with $60trn (€54.7bn) in assets between them. The only disclosure requirement they face is filing progress reports on the extent to which they are doing ESG (environmental, social and governance) integration.The PRI proposes ejecting signatories that have either not made “meaningful progress” in implementing the principles or act in a way that “undermines their commitment to responsible investing.” The PRI says these measures should “incentivize those currently making little or no progress and/or using the PRI as a marketing tool.”

Finally, the PRI wants to give new signatories more time to learn about ESG integration before having to file mandatory progress reports. It therefore proposes extending the grace period for this group from one year currently to two or three years.

Another idea is to introduce a new ‘associate member’ category. “This would enable potential signatories to benefit from some of the learning, development and networking benefits that the PRI provides, while they develop, without the reporting obligations of being a full signatory,” the organisation said.

PRI signatories have between December 21 and March 18 to review its proposals and, in an attached questionnaire, provide their feedback. A spokesman said that after then, the PRI would make specific recommendations for the next signatory meeting in Singapore in September 2016. Link