Principles for Responsible Investment
| Principles for Responsible Investment | |
| Source: | United Nations Environment Programme Finance Initiative |
| Sector: | Investment (asset owners, investment managers, service providers) |
| Prerequisites: | none |
| Classification | International information exchange & Individual institutional level |
| Potential Impact: | Small |
| Resource Impact: | Minimal at governmental level (awareness raising campaign among financial community); Moderate at individual investors’ level (mainly related to reporting requirements) |
| Timing Implications: | Impact would take effect within several years and several reporting cycles |
| Country/Region | Global (over 3,000 organizations in over 60 countries and representing over USD 100 trillion in managed assets) |
| Application to Armenia | Signing onto the Principles would bring about several benefits to Armenian investors such as publicly demonstrating the adoption of responsible investment practices and accountability and transparency to the public in managing ESG issues; access to related events to dialogue with international peers and stakeholders; and access to specific international know-how and best practice. |
The Principles for Responsible Investment (PRI) initiative is the world’s leading proponent of responsible investment. It works to understand the investment implications of ESG factors, and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions. The Principles were designed through the UN partnership with the world’s largest institutional investors and launched in April 2006 at the New York Stock Exchange.
The PRI is active on several key programs that seek to support investors in taking ambitious climate action, including Climate Action 100+, the UN-convened Net Zero Asset Owner Alliance, the Task Force on Climate-Related Financial Disclosures and the Inevitable Policy Response.
As with the other initiatives of UNEP FI, the investment initiative is also based on assessing the progress signatories make on adhering to the Principles. Most recently, the initiative increased the number of Task Force on Climate-related Financial Disclosures (TCFD) aligned climate change indicators mandatory for its reporting to three.
The main requirement to becoming a signatory of the Principles and a member of UNEP FI is the commitment to the annual public disclosure process. The PRI acts in the long-term interests of its signatories, and of the financial markets and economies in which they operate and ultimately of the environment and society as a whole.
The PRI is fully independent. It encourages investors to use responsible investment to enhance returns and better manage risks but does not operate for its own profit; it engages with global policymakers but is not associated with any government; it is supported by, but not part of, the United Nations. The six Principles for Responsible Investment set out below are a voluntary and aspirational set of investment principles that offer a menu of possible actions for incorporating ESG issues into investment practice. They were developed by investors, for investors. In implementing them, signatories contribute to developing a more sustainable global financial system. They have attracted a global signatory base representing a majority of the world’s professionally managed investments.
UNEP FI Principles for Responsible Investment.
| Number | Principle |
| #1 | Incorporate ESG issues into investment analysis and decision-making processes. |
| #2 | Be active owners and incorporate ESG issues into ownership policies and practices. |
| #3 | Seek appropriate disclosure on ESG issues by the entities in which we invest. |
| #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 towards implementing the Principles |