Other Group

UN Principles for Responsible Investment

Location:

London, UK

The United Nations Principles for Responsible Investment, also known as Principles for Responsible investment or PRI, is a non-governmental organization affiliated with the United Nations that urges global money management firms and financial services providers to pledge to adhere to left-of-center Environmental, Social and Governance (ESG) investment principles. The organization is funded by the money management firms, asset owners, and service providers that pledge to adhere to its principles. The group claims to receive no funds from the United Nations but does receive grants from several notable left-of-center foundations such as the Bloomberg Family Foundation, the ClimateWorks Foundation, and the Gordon and Betty Moore Foundation. [1]

Background

Principles for Responsible Investment was founded in 2005 when Kofi Annan, then the Secretar- General of the United Nations, invited a 20-person working group from financial institutions and nonprofits to develop “Principles for Responsible Investment.” The resulting organization was formed after the working group finalized the six principles supporting Environmental, Social and Governance (ESG) investment practices. The principles created by the group are based on the notion that ESG investment practices create positive financial returns. [2]

The organization began with more than 200 signatories to the principles. including money management firms, financial service providers, banks, and pension funds. Initial signers of the principles included labor union-affiliated Amalgamated Bank, Banco, the California Public Employee Retirement System (CalPERS), and ESG-friendly firm Wespath Investments. [3]

The United Nations does not provide funding to PRI but had a large role in its founding and two UN programs have representation on its board. The United Nations Environment Programme Finance Initiative (UNEPFI), an arm of the United Nations that promotes environmentalist policies within the global financial sector and advances claims that environmentalist related investment policies result in better financial performance. The PRI also has a representative from the United Nations Global Compact on its board, a similar organization that advocates for businesses to sign an agreement to adhere to ten principles centered around labor, environmental, and anti-corruption issues. [4]

Signatories

Since its founding, PRI has grown to include more than 4,000 signing institutions, representing a purported $110 trillion in collective assets. Signers include institutions that have a history of embracing left-leaning policies or labor union ties such as the California State Teachers Retirement Fund (CalSTRS), the California Public Employee Retirement System (CalPERS), Amalgamated Bank, Sierra Club Foundation, AFL-CIO Reserve Fund, and SEIU Pension Plans Master Trust. [5] [6]

Funding

The UN Principles for Responsible Investment is primarily funded by membership fees paid by the signatories. Membership fees are tiered based on assets under management with categories for asset owners, investment managers, and service providers. Fees range from £478 to over £14,000. The organization also receives funding from an annual conference as well as several grants from left-of-center foundations. In 2020, the organization received grants from the Bloomberg Family Foundation, Ceres, ClimateWorks Foundation, the European Climate Foundation, Gordon and Betty Moore Foundation, Generation Foundation, and Tipping Point Fund. [7]

References

  1. “Financial Information.” Principles for Responsible Investment. Accessed February 7, 2022. https://www.unpri.org/about-us/about-the-pri/financial-information ^
  2. “About the PRI.” Principles for Responsible Investment. Accessed February 7, 2022.  https://www.unpri.org/about-us/about-the-pri ^
  3. “About the PRI.” Principles for Responsible Investment. Accessed February 7, 2022.  https://www.unpri.org/about-us/about-the-pri ^
  4. “About the PRI.” Principles for Responsible Investment. Accessed February 7, 2022.  https://www.unpri.org/about-us/about-the-pri ^
  5. “Signatory Directory.” Principles for Responsible Investment. Accessed February 7, 2022. https://www.unpri.org/signatories/signatory-resources/signatory-directory ^
  6. “About the PRI.” Principles for Responsible Investment. Accessed February 7, 2022.  https://www.unpri.org/about-us/about-the-pri ^
  7. “Financial Information.” Principles for Responsible Investment. Accessed February 7, 2022. https://www.unpri.org/about-us/about-the-pri/financial-information ^
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