Our webinar on Green Investing, was a great success. Jonathon Curtis talked about all things ESG & why it is the fastest growing investment trend.
We doubt many people will correctly answer this question. The common theme linking three apparently unconnected organisations, however, also applies to thousands of others, and no doubt many more in the coming years. What are we talking about? We’re all signatories of the United Nations Principles for Responsible Investment (PRI).
In this article we’ll explore what the PRI is, what the principles are and what they could mean for your investments.
There’s no denying it. People, businesses and organisations large and small are becoming increasingly aware of the impact their decisions have on the world. That’s a good thing. Unless society changes how it produces and consumes, scientists believe we could cause irreversible damage to the planet. It’s not just the environment that’s a concern to many though. Human rights, equality, and the way companies are run are also becoming increasingly important issues.
Although it might not seem like an obvious thing to bring about positive change, investing can make a big difference. Not only does what people and institutions invest in signal where they believe the world is headed, investing in a company makes you a part-owner, giving you a right to say how it’s run.
So in 2005, then UN Secretary-General Kofi Annan got together some of the world’s biggest institutional investors and industry experts. Their aim was to discuss how ESG (environmental, social and governance) investing could play its part in helping make the world a better place. The result was the Principles for Responsible Investment.
The PRI is an independent network of investors, supported by the United Nations, which has grown to become the world’s biggest supporter of responsible investment. There are nearly 5,000 signatories including some of the world’s largest investment companies such as MSCI, Bloomberg and Vanguard to name a few.
The mission of the PRI is to achieve a sustainable global financial system via its 6 principles, which all signatories agree to follow.
We will incorporate ESG issues into investment analysis and decision-making processes.
We will be active owners and incorporate ESG issues into our ownership policies and practices.
We will seek appropriate disclosure on ESG issues by the entities in which we invest.
We will promote acceptance and implementation of the Principles within the investment industry.
We will work together to enhance our effectiveness in implementing the Principles.
We will each report on our activities and progress towards implementing the Principles.
Investing through a PRI signatory means you can be confident you’ll be investing with a company with a genuine commitment to ESG issues. Not only does that help contribute to developing a more sustainable world, but as ESG can help avoid investment risks and identify opportunities, it could potentially enhance performance too.
Signatories also have access to PRI’s industry-leading research, insights and resources. This helps them stay up-to-date with the evolving world of responsible investing and keep improving their own ESG capabilities for their clients’ benefit.
That’s why we’re proud to be signatories of the PRI. Not only do we think investing more responsibly is the right thing to do – it also means we’re better aligned to those clients who want to invest more responsibly themselves.
In practice being a signatory means every fund we research, whether for our Growth portfolios or our ESG-dedicated Responsible Growth ones, has had its ESG standards analysed and reviewed. This isn’t about us trying to be righteous – we also believe ESG can help fund managers improve their performance. So it makes sense for us to know what they’re doing about it.
Being a PRI signatory proves our dedication to responsible investing. While others may also claim their commitment, we’re not aware of any of our peers within the international financial advice industry being signatories. Of course you don’t have to be a PRI signatory to be genuinely supportive of responsible investing. We believe though, as do thousands of other investment firms, that PRI is the global gold-standard. So for us the decision to commit to these responsible investment principles was an easy decision to make.
If you’d like to find out more about the PRI, our Responsible Growth portfolios or anything else about ESG investing, please contact your Skybound Wealth advisor or your local Skybound Wealth office.
If you would like to find out more about ESG and our responsible growth portfolios click here!
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