UN PRI plans to delist wayward members

The UN Principles for Responsible Investment will soon begin cracking down on firms that have agreed to incorporate the principles into their investment decisions but haven’t made tangible progress in doing so, according to one of its managing directors.

“It’s time to increase accountability about the principles themselves,” Fiona Reynolds, a managing director at UN PRI, told the audience at sister title Private Equity International’s Responsible Investment Forum: New York 2017.

“We’re putting in place a minimum standard of where you need to be at [in order] to be a UN PRI signatory, and then we will delist signatories who aren’t making progress against the principles.”

UN PRI turned 10 last year and has expanded in recent years by opening an office in the US, where Reynolds said the adoption of the principles has been fast growing.

Reynolds noted that in the first decade of existence of the organisation, it focused more on basic issues such as trying to get investors to understand the materiality of ESG issues or the risk involved if a firm doesn’t think of ESG factors. “It was about giving people [a start] in thinking about integrating responsible investment and engagement,” she said.

UN PRI has come a long way since its inception, and now has 1,700 signatories worldwide including more than 300 in the United States. At this point, it has recognised the need to make sure that the principles are applied.

Reynolds noted that it will identify a watch-list. It then plans to give signatories two years to improve their practices to a point specified by the UN PRI.

“If they don’t make that, then we will delist people,” she said. “We obviously don’t want to delist people; we want to get everyone started, so we will work with signatories to get them moving.”