The Principles for Responsible Investment (PRI), the UN responsible investment body, has launched a consultation on its ‘Progression Pathways’ initiative that gives signatories a step-by-step journey towards better practices.
The PRI proposes two alternative models to structure the Progression Pathways. The first is centred around investor purpose, clarifying the actual objectives of investors’ responsible investment approaches. This could include focusing on incorporating environmental, social and governance risks and opportunities, and actively addressing the drivers of financially material sustainability risks. The second looks at the specific sustainability issues that investors are prioritising in their practices. Example areas include climate change, human rights, or biodiversity. During the co-design process with signatories, one of these two models, or a combination of both, will provide the basis for the new Progression Pathways.
The Progression Pathways are being developed in response to signatory feedback that showed 95 per cent of respondents acknowledged the expectation for progression in responsible investment activities and 83 per cent expressed the need for a more relevant representation of their progress in this arena.
The pathways will better clarify the different roles of responsible investors in a sustainable financial system and enable more targeted support for signatories as they advance their responsible investment practices.
To kick off the co-design process, the PRI is currently hosting a series of regional workshops to discuss the new concepts. In addition, there will be other opportunities through the end of 2023 and into 2024 for signatories to engage virtually or provide written feedback.
David Atkin, CEO of the PRI says: “The nature of what it means to be a responsible investor has fundamentally changed since the PRI’s inception in 2006.
“Expectations in the market and among regulators have advanced and at times diverged. Differences in the intended outcomes of responsible investment practices have become more apparent, creating risks of misaligned expectations, and making progress more difficult. Our signatories should not feel boxed in, thinking that there is a one-size-fits-all approach. These new frameworks will empower us to develop targeted guidance, tools, reporting, and accountability standards, while fostering communities of shared practice, and we look forward to co-designing these with our signatories.”