PRI 2021-2024 Strategy Heralds Focus on Real-World Impact

Strategic plan links financial risks to investment outcomes in the real economy.

The UN-supported Principles for Responsible Investment (PRI) has launched a new three-year interim strategy, which seeks to enable investors to integrate real-world impacts of investments into their decision making.

The new theme is titled ‘Building a bridge between financial risk, opportunities and real-world outcomes’.

The PRI’s 2021-2024 strategy document says that, by 2024, it aims to succeed on several points: “Legal frameworks for investing for impact will be in place in several markets. Leading financial systems will align incentives, behaviours and policy with sustainability.

“Investors will use international human rights frameworks in their investment activities and align with a 1.5 degree pathway, working towards net zero by 2050.”

Martin Skancke, Chair at the PRI, and Fiona Reynolds, CEO of the PRI, wrote in a blog: “Increasingly, we see investors recognising feedback loops between the real economy and financial markets, where the outcomes they shape directly impact the risks and opportunities they face.

“So, in this strategy, we will help those signatories seeking to understand what this looks like in practice, how to integrate and measure outcomes, while remaining firmly grounded in fiduciary duty and the broader role of investors in society.”

Each three-year strategy seeks to advance the objectives of the organisation’s overarching 10-year framework – ‘A Blueprint for Responsible Investment’ – laid out in 2016.

The PRI’s ultimate aim is to enable a sustainable global financial system, as set out in its mission statement. However, it has decided to consult with signatories on its mission and purpose later in 2021, which could lead to a vote in 2022.

The PRI board explained in a feedback document on the strategy it would seek to address perceptions that a diversity of signatory views on the organisation’s purpose and vision was beginning to hamper its effectiveness.

“The Board thus believes now is a good time to review the mission statement with signatories as an opportunity to engage with signatories, have a more structured discussion on these issues, and strengthen a shared vision,” the document said.

Significant changes have evolved since the original mission statement was developed; namely, the adoption of the Paris Agreement and the UN Sustainable Development Goals (SDGs).

The new strategy was developed closely with its signatories.

“Importantly, the new strategy maintains an inclusive approach; the PRI will remain a ‘big tent’ organisation at its heart, open to all potential signatories,” the blog said.

Two areas within the PRI’s ESG incorporation work will be prioritised in the new strategy: firstly, climate mitigation, as the most urgent existential challenge facing society, including a focus on net-zero as well as biodiversity; and secondly, human rights, as both an immediate source of protection for individuals from harm and discrimination and as a foundation for lasting social equality, stability and productivity, the blog explained.

This year, the PRI will also pilot its new reporting framework, it added.

A review of activities from the past year can be found in its work programme.

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