UNPRI to start lobbying on ESG regulation

European Commission discussions look at scenarios for ESG disclosure.

The United Nations Principles for Responsible Investment (UNPRI), which represents institutional investor assets of $20 trillion, is planning to take its first steps to influence legislation in favour of ESG investment issues with the launch of a public policy network to lobby regulators and policy makers. The UNPRI said the network would “seek out ways for collaboration between policy makers and investors, to encourage better policy making to support responsible investors and to encourage governments’ own funds to be aligned with the PRI”. A target date for the initiation of the network has not been announced. The plans are set out in a submission by the UNPRI to the European Commission, part of a series of European discussions looking at whether the disclosure of corporate environmental, social and governance (ESG) information should be tightened up. The discussions began in September 2009 and culminated in a meeting hosted by Pedro Ortún, director in the Commission’s Directorate-General for Enterprise and Industry, last month. Additionally, the UNPRI said that from 2011, it will set out a minimum of public disclosure requirements for investor signatories to the PRI. It said: “This will be a set of non-commercial information that PRI signatories will need to publish each year.” In its EU submissions, the PRI encouraged the Commission and member states tocoordinate as much as possible with these minimum disclosure requirements in order to achieve a “harmonised approach” to responsible investment across borders.
The European Commission review, which is not yet a regulatory process, also received a joint position paper from the European Sustainable Investment Forum (Eurosif), the European Federation of Financial Analysts Societies, the Prince of Wales’ Accounting for Sustainability Project, Railpen Investments and World Intellectual Capital/Assets Initiative. The paper proposes a combined financial/sustainability approach to corporate reporting as one lever that could embed sustainability in corporate strategy and management practices. The group says its supports a mandatory regulatory approach to ESG disclosure and reporting at the European level. It said there is currently no appropriate ESG disclosure and reporting framework that fully meets the needs of companies and investors at the moment. Consequently, the group called for a high-level working group composed of representatives of major stakeholders to further discuss the issue. At the final European Commission meeting, almost 50 attendees looked at five hypothetical scenarios for the potential shape of European public policy on ESG disclosure in 2015.
Link to EU ESG discussions