The Principles for Responsible Investment (PRI) gathers in Cape Town, South Africa today (October 1) for its seventh annual PRI in Person event: the only opportunity of the year for existing and potential signatories to meet up in one place.
With some 1,200 signatories in 50 countries managing US3$4trn, the organisation has come a long way in 10 years.
But with its growing maturity, the PRI is undergoing a transition with the announcement that founding Executive Director James Gifford is standing down and with a permanent replacement for Advisory Council Chairman Wolfgang Engshuber still being sought.
The changes at the top have coincided with an ambitious and sometimes difficult attempt to get signatories to report on their RI activities – the new Reporting Framework.
So what better time to catch up with Fiona Reynolds? Reynolds, who joined the PRI in February in the new role of Managing Director, is charged with driving the initiative’s “organisational development and growth”. She joined from the Australian Institute of Superannuation Trustees where she was chief executive for six years.
She says her vision is for the PRI is to make it a resource that signatories can draw on, becoming “the place to go” for all things responsible investment, to help guide and assist signatories through the process of not only integrating RI but – importantly – telling the story of how they go about it.
This will take the form of practical assistance, such as case studies and academic evidence attesting to the value of RI. She says: “We want people to come to us.”
She’s also aware that it’s “critical” for the PRI to gain more exposure in the US, where she concedes responsible investment, for a variety of reasons, is not yet part of the mainstream.The PRI’s efforts in the US took a hit earlier this year when US Network Manager Diane Bratcher left the organisation after less than a year in the role. The PRI’s new Annual Report reveals that the organisation is reviewing its strategy in the US, with a new plan set to be finalised in early 2014.
In other countries, such as Japan for example, where English is not widely used, Reynolds reckons the PRI needs to be more “on the ground” to help it deliver its message.
On top of that, the PRI needs more staff with direct investment experience, such as incoming Director of Policy and Research Helene Winch and newly hired Senior Responsible Investment Specialist Sagarika Chatterjee, who are joining the PRI from the BT Pension Scheme and fund manager F&C respectively.
Reynolds told RI that Rob Lake’s role as Director of Responsible Investment would not be replaced.
Turning to Gifford, Reynolds the Executive Director is a “difficult role to replace: we’re not going to find another James out there, he’s a unique individual”.
Given all that is going on, probably the greatest issue on the table at the PRI at the moment, though, is the new Reporting Framework, formally unveiled this week. It will mean that for the first time signatories will be obliged to report on their RI activities, unquestionably a major development in enabling not just clients but other stakeholders in their assessments of signatories’ RI activities.
The PRI will then go on to assess the reports, confidentially, though this procedure will be piloted for two years to bed it down.
By the middle of next year, the PRI expects nearly 800 of its signatories to have used the framework to disclose their “policies, processes and performance”. Crucially, those that fail to report will be delisted.
Reynolds says she expects between 5-10% of signatories will be de-listed for not reporting. How this plays out will be an interesting test for the PRI and the wider responsible investment community.
The reporting framework will deliver a set of outputs that signatories can make use of and “meaningful” information for clients, beneficiaries and other stakeholders. PRI signatories will have six months to submit their responses.As part of its efforts to offer more to signatories, the PRI – which Reynolds admits “runs lean” – will seek to add further depth and expertise to its team, which will involve “both additional talent and financial resources”.
So as responsible investment edges ever closer towards the mainstream, the PRI’s role in the transition appears to be in secure hands.