PRI Makes Strides in Changing the Global Attitude to Responsible Investing

The United Nations-supported PRI has made strides in changing the global attitude to responsible investing.

Originally launched in April 2006, as the globally recognized benchmark for the considerations of environmental, social and governance (ESG) issues, the United Nations-supported Principles for Responsible Investment (PRI) has become globally recognized for establishing the standards within responsible investing, challenging investors around the world to incorporate them in their investment processes.

In 2006, the PRI had 63 signatories, today there are 2,3721. Russell Investments became a signatory in 2009. The number of PRI signatories continues to grow across the globe, with institutions disclosing their approach to responsible investments, policies and procedures. The PRI has become the advocate for discussion and debate and leading the financial industry through innovation in this evolving and crucial area in our industry.

PRI Signatories Worldwide
Source: UNPRI.org, 2018/19 signatories

The PRI hosts an annual conference that welcomes signatories and other investment professionals to collaborate and learn more about responsible investing in today’s landscape. This year, the PRI in-person conference was held in Paris Sept. 10-12. As over 100 expert speakers from across the investment industry and beyond took to the stage to discuss best practices and debate the impact of emerging global issues, there was one very important message that percolated throughout—the message to act now. We often talk about the need for change and the idea of creating a 2050 goal, but as the presenters made all-too clear, that’s simply not enough anymore. The PRI’s new goal is to act now and to act fast.

The importance of PRI

The PRI is a community of investment organizations (signatories) that believe in responsible investing and are continuously striving to better their approach and best practices.

Each year, the PRI reviews the signatory’s credentials both on an individual and a peer-relative basis before awarding the company an official PRI rating for the year, generating a benchmark for signatories. At Russell Investments, we know this process intimately and have recently received our own A/A+ rating.

The following are the six key principles that the PRI have established when assessing signatories for an overall rating. These principles have become globally recognized and have helped shape the framework for better and more consistent responsible investment processes.

  1. Incorporate ESG issues in investment analysis and decision-making processes
  2. Actively own and incorporate ESG issues in ownership policies and practices
  3. Seek appropriate disclosure on ESG issues from the entities invested in
  4. Promote acceptance and implementation of the principles within the investment industry
  5. Work together to enhance effectiveness in implementing the principles
  6. Report on activities and progress toward implementing the principles

The lack of policies and laws in place within the responsible investment landscape makes the PRI more crucial than ever. In 1972, the first Danone chairman and CEO said, "There is only one earth, we only live once." Those words kick-started a vision that lives on today: to bring health to our planet and to generations of people through the PRI and its signatories, taking responsibility now, and in the future.

An ongoing global effort and commitment to the PRI principles is one of the best ways that the influential investment community can not only demonstrate to asset owners its dedication to responsible investing but also influence and encourage peers alike to start taking action now—instead of in the future.

The bottom line

As the PRI continues to drive change and provide the framework, tools and knowledge toward responsible investing, we firmly believe it’s the investment community that needs to take responsibility for the actions of today. Tomorrow is no longer good enough.

Russell Investments has made great strides over the years in incorporating the PRI principles into our processes, including manager research, portfolio management and proxy voting and engagement. In addition, considering and incorporating ESG-specific strategies—such as our proprietary decarbonisation strategy and ESG tilting methodology—form an important part of our product development process.

We will continue to focus on the implementation of PRI’s principles in order to best support our clients and society in responsible and sustainable investing.

Disclosures

These views are subject to change at any time based upon market or other conditions and are current as of the date at the top of the page.

Investing involves risk and principal loss is possible.

Past performance does not guarantee future performance.

Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.

This material is not an offer, solicitation or recommendation to purchase any security. Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type.

The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional. The information, analysis and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual entity.

Please remember that all investments carry some level of risk. Although steps can be taken to help reduce risk it cannot be completely removed. They do no not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.

Investments that are allocated across multiple types of securities may be exposed to a variety of risks based on the asset classes, investment styles, market sectors, and size of companies preferred by the investment managers. Investors should consider how the combined risks impact their total investment portfolio and understand that different risks can lead to varying financial consequences, including loss of principal. Please see a prospectus for further details.

Indexes are unmanaged and cannot be invested in directly.

Russell Investments' ownership is composed of a majority stake held by funds managed by TA Associates with minority stakes held by funds managed by Reverence Capital Partners and Russell Investments' management.

Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the "FTSE RUSSELL" brand.

Copyright © Russell Investments Group LLC 2019. All rights reserved.

This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an “as is” basis without warranty.

UNI-11547

© Russell Investments

More Tax Planning Topics >