Principles for Responsible Investment (“PRI”)

What are the six Principles for Responsible Investment?

The six Principles for Responsible Investment are a voluntary and aspirational set of investment principles that offer a menu of possible actions for incorporating ESG issues into investment practice.

The Principles were developed by investors, for investors. In implementing them, signatories contribute to developing a more sustainable global financial system. They have attracted a global signatory base representing a majority of the world’s professionally managed investments.

  • 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.

Read the full outline here

ESG integration into equity analysis and investment decisions is aimed at lowering risk and/or generating returns.  Download this interesting article by PRI on Equity Analysis and Credit Analysis showing how many investors have turned to ESG factors to mitigate risk.

Asset owners, sitting atop the investment chain with long-term investment horizons, are ideally placed to drive responsible investment throughout the investment cycle.  An investment policy should reflect an asset owner’s strategy and views on best practice in managing investments, including incorporating ESG factors.  Download this interesting article by PRI on Enhancing manager selection with ESG insight showing how an  investment policy should define what ESG means to an investment manager in practical terms.