Rather than just celebrate the tenth anniversary of the United Nations Principles for Responsible Investment, it seemed more appropriate to focus instead on the work not yet done. The last decade has been critical in terms of socializing the Principles and gaining signatories. The uptake has been dramatic. From a cold start the PRI is now at roughly 1,500 signatories representing more than US$60 Trillion.
Now the question is what are those signatories doing with the Principles. The mission states: “The PRI will work to achieve this sustainable global financial system by encouraging adoption of the Principles and collaboration on their implementation; by fostering good governance, integrity and accountability; and by addressing obstacles to a sustainable financial system that lie within market practices, structures and regulation.”
The numbers do not yet add. The recently released USSIF 2016 Report on US Sustainable, Responsible and Impact Investing Trends shows US$8.72 Trillion domiciled in the US, and the 2016 Global Sustainable Investment Review from GSIA shows US$22.89 Trillion professionally managed under responsible investment strategies. Impressive numbers to be sure, but even double-counting the US we cannot get to $60 Trillion. Ignoring the rest of the global capital markets, there are a lot of assets just under the auspices of PRI signatories that do not adhere to the mission.
With that as preamble, I wrote my latest piece for CityWire USA to address how gatekeepers should consider the significance, when evaluating asset managers, of being a PRI signatory. I propose rather than accepting signatory status as a proxy for an institutionalized ESG commitment and process, use the 6 Principles as a rubric for evaluating those managers to see to what degree they practice that which they undersigned.
A great deal has been achieved, though, so I will still raise a glass. Joyeux anniversaire, PRI. Now everyone back to work.