UNPRI names five ejected signatories and starts transparency reporting talks

Discussions over the next year on a public disclosure framework for responsible investment.

The $18 trillion (€12.7 trillion) United Nations Principles for Responsible Investment (UNPRI) has kicked out five signatories after they failed to report progress on implementing its six environmental, social and governance investment principles. The ejected groups are DESBAN, the Brazilian social security foundation, the Christopher Reynolds Foundation in the US, Foresters Community Finance, an Australian social investment company, Oasis Group Holdings, the South African fund manager and Trinity Holdings, the South African resources investor. It is the first time the PRI has toughened its membership criteria to exclude firms that show no signs of adopting the standards despite signing up. In addition, three institutions have voluntarily left the PRI, notably the $48bn New York State Teachers’ Retirement System (NYSTRS) – one of the top 10 largest US pension funds. Other voluntary leavers were Mennonite Mutual Aid (MMA), the Anabaptist financial group, and Rapaki Property Group in New Zealand. The PRI said it had removed the five lapsed signatories for not participating in its mandatory annual reporting and assessment process for asset owners and managers. Signatories are given a one-year grace period after joining the PRI before they must report progress. The PRI said it also aimed to further tighten its reporting process and make it public.Over the next year it will consult with signatories on a new transparency framework, which could become part of the mandatory reporting and assessment process from 2011. James Gifford, PRI executive director said: “The PRI initiative will be working with signatories over the next year to develop appropriate indicators for public reporting of responsible investment activities from 2011. We would not expect signatories to disclose commercially sensitive or legally confidential information. But signatories should be sufficiently transparent to ensure their clients, customers, members and other stakeholders have a clear sense of their responsible investment processes, activities and capabilities.” With regards to the ejected signatories, Gifford said: “Given the financial crisis, we are delighted that so few signatories were unable to participate in the reporting and assessment process. We understand that participation in this survey can be time consuming, and some funds have found it difficult to allocate those resources, particularly during these times. We would welcome them back at any time.”
There are now 573 signatories to the PRI, of which 93 joined this year. The breakdown is 182 asset owners, 282 investment managers and 109 professional service partners.