Principles for Responsible Investment

Principles for Responsible Investment

25 Camperdown Street, London, E1 8DZ, United Kingdom

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The Principles for Responsible Investment (PRI) Initiative provides a framework to support long-term & sustainable markets for investors through ESG analysis & responsible ownership.

Principles for Responsible Investment cover
Mission We believe that an economically efficient, sustainable global financial system is a necessity for long-term value creation. Such a system will reward long-term, responsible investment and benefit the environment and society as a whole.

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.
Description

The world is changing rapidly. While our market-based economy has emerged as the most efficient system for allocating scarce economic resources, it is giving rise to growing array of social inequalities, environmental impacts and negative externalities which are affecting companies. Unprecedented environmental and social pressures driven by food, water and energy security, access to natural resources, climate change, human rights, supply chain labour standards and ageing populations have become material issues for business and the corporate world. The impact of poor corporate governance practices on shareholder value, accentuated by the global financial crisis, has also lifted issues such as transparency, corruption, board structure, shareholder rights, business ethics, risk management and executive compensation to the top of the investor agenda.

Responsible investment is an approach to investment that explicitly acknowledges the relevance to the investor of environmental, social and governance (ESG) factors, and the long-term health and stability of the market as a whole. It recognises that the generation of long-term sustainable returns is dependent on stable, well-functioning and well governed social, environmental and economic systems. It is driven by a growing recognition in the financial community that effective research, analysis and evaluation of ESG issues is a fundamental part of assessing the value and performance of an investment over the medium and longer term, and that this analysis should inform asset allocation, stock selection, portfolio construction, shareholder engagement and voting. Responsible investment requires investors and companies to take a wider view, acknowledging the full spectrum of risks and opportunities facing them, in order to allocate capital in a manner that is aligned with the short and long-term interests of their clients and beneficiaries.

Mounting evidence of the financial materiality of ESG issues, alongside growing demand

Founded UN Secretary General Kofi Annan and a group of 20 institutional investors
Products ESG, sustainability, responsible investment, integration, active ownership, collaboration, reporting
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