- Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
- Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
- Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
- Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
- Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
- Principle 6: We will each report on our activities and progress towards implementing the Principles.
“In signing the Principles, we as investors publicly commit to adopt and implement them, where consistent with our fiduciary responsibilities. We also commit to evaluate the effectiveness and improve the content of the Principles over time. We believe this will improve our ability to meet commitments to beneficiaries as well as better align our investment activities with the broader interests of society.”
The United Nations Principles for Responsible Investment (UN-PRI) is a global initiative encouraging investors to demonstrate their commitment to responsible investing. Signatories publicly commit to implementation of the Six Principles of Responsible Investment (above). Globally, there are 275 asset owners, 818 investment managers, and 183 “professional service partners” (namely, consultants) who have signed the UN-PRI. Of these signatories, 21 asset owners, 138 investment managers, and 35 professional service partners reside in the United States.
Each signatory has a one-year grace period after which they must complete a survey indicating the extent to which ESG has been integrated into their investment process. Survey content includes inquiries around prior and future ESG initiatives, performance indicators and measures of success, governance and management structure, and a company’s incorporation of ESG in stock selection. In administering this survey, the UN-PRI aims to enable peer comparison among signatories.
Clients are increasingly requesting investment managers to sign. It is only a matter of time before managers are directly compared on survey results.