Seoul, Korea 2008-06-17

The Principles for Responsible Investment (PRI) Initiative, a partnership between global investors and two UN agencies surpassed a new milestone today. At an official ceremony in Seoul it was announced that the number of signatories more than doubled in 2008 to 381, representing USD 14 trillion in assets under management.

At the same time, a comprehensive survey from the PRI shows some of the world’s largest institutional investors are making significant progress in integrating environmental, social and governance (ESG) issues into their day-to-day business. Though there is also still much to do.

PRI Report on Progress 2008 (www.unpri.org/report08), released at the PRI’s second annual conference, demonstrates that signatories are “going to the next level” in implementing the six principles backed by UN Secretary-General Ban Ki- moon. It reveals a 31% increase this year in the number of asset owners (such as pension funds and insurance companies) who have signed up to the initiative and now publish specific reference to how they integrate responsible investment or ESG issues within their investment or ownership practices.  

“The increasing percentage of PRI asset owners that are looking at ESG issues when selecting mainstream investment managers should be sending a clear signal to the market that responsible investment capability is becoming core to the way investment is done”, said PRI Executive Director James Gifford.  

Key results from the survey include:

• 32% of respondents said they would now revisit relationships with service providers in light of RI/ESG issue-related capabilities. A dramatic 68% increase on the number of signatories willing to do this last year.
• 76% of signatories report engagement in dialogue with policy makers and industry regulators on ESG issues. A sizeable 29% increase in such activity among asset owners compared to last year.
• 70% of signatories ask companies to produce standardized reporting on their environmental, social or governance policies, practices or performance, the same figure as in 2007, although with a further 10% planning to do so in 2008.
• Signatories are becoming more collaborative. The number of asset owners involved in collaborative engagement to a medium or large extent rose from 38% to 47% this year. The PRI’s online Engagement Clearinghouse is proving an increasingly popular tool for such collaboration with nearly half of the respondents using it, up from 40% last year. A further 26% of investment managers and 13% of asset owners planning to use the Clearinghouse for the first time during 2008.
• Levels of disclosure reported by signatories in the 2008 survey were generally high. Among investment managers, 75% of respondents are systematically reporting their RI/ESG related engagement activities to at least some extent and a further 18% plan to do so in 2008. For asset owners, the corresponding figures are 76% already reporting, with 6% planning to do so in 2008.
• Principle 1 of the PRI, which focuses on incorporating ESG issues into investment analysis and decision making was ranked the most difficult to implement.