Asset owners and other UK-based investors do not know when they can or should pursue sustainability impact objectives, says a new report which calls for greater legal certainty. The paper, produced by the Principles for Responsible Investment in partnership with UN Environment Programme Finance Initiative and the Generation Foundation, recommends policy measures that would “empower” investors both to consider sustainability factors and to pursue sustainability impact goals. It asks policymakers and regulators to clarify when sustainability impact goals must or can be considered as part of fiduciary duties of loyalty, care and prudence, and to provide greater certainty that purpose-related requirements (i.e. duty to act in beneficiaries’ ‘best interests’) entail consideration of sustainability impact goals. “Investors in the UK remain hesitant to change their established practices and pursue sustainability impact goals, even when this is required to achieve financial objectives,” said Margarita Pirovska, Director of Policy at the PRI. The analysis builds on a 2021 report covering 11 jurisdictions, including the UK, authored by Freshfields Bruckhaus Deringer and commissioned by the PRI, UNEP FI and the Generation Foundation.
Former US Vice-President @algore talked about our joint project "A Legal Framework for Impact" today at UNEP FI's Global Roundtable 2022. Explores investors’ legal obligations and freedoms to invest for sustainability impact: https://t.co/BDZ8cF9SgS @PRI_News @GenerationFndt pic.twitter.com/ngoAknIARW
— UNEP FI (@UNEP_FI) October 10, 2022