This is the second annual report on PRI implementation by signatories. Given the growing profile of the PRI, and its increasingly global nature, this report provides an extensive guide to the responsible investment approaches to investment decision making and ownership practices currently being practiced within a significant segment of the institutional investment industry.

In particular, it provides insight into the progress achieved by signatories over the course of 2007 as well as specific examples of best practices and initial implementation steps.

The approach followed in preparing this report was similar to that used in 2007. The report is based on information provided by signatories in answers to an online questionnaire that was designed to capture information on their RI activities. The questionnaire retained much of the structure used for the 2007 report.

However, in response to feedback from signatories and input from the PRI Secretariat and Assessment Working Group, improvements were made. In particular, the number of questions was reduced substantially and efforts were made to reduce the time required to complete the questionnaire. The questionnaire was again structured around the six Principles and signatories were asked to select from possible answers (e.g. Large extent, Moderate extent, Small extent or Not at all in relation to the extent they were involved in a nominated activity),
provide data (e.g. percentage of staff receiving ESG training), and offer free-text responses to further elaborate on their activities.

The scores and comments presented in this report are based largely on self-assessments made by signatories. However, approximately 25 per cent of responses from both Asset Owners (AOs) and Investment Managers (IMs) were verified in an effort to enhance the consistency with which the guidance provided in the self-assessment tool was interpreted.

The responses chosen for verification were broadly those which attained the highest scores under the selfassessment. The verification was undertaken jointly by the PRI Secretariat and Mercer and involved one-hour telephone discussions of 15 key indicators.

The overall assessment results are presented first, followed by a discussion of progress in implementing various aspects of each Principle. Signatories were also asked a series of questions focused on RI/ESG issues in emerging markets, the results of which are presented next.

Finally, signatories were asked for general comments on issues such as their priorities in the RI/ESG area, suggestions for the PRI Secretariat and their ranking of the Principles according to difficulty of implementation. Some of the insights gained from these comments are presented.

Download Principles for Responsible Investment Report on Progress 2008

PDF format, 1.9MB, 52Pages.

Key Findings

• Signatories who participated in the 2007 survey (conducted early in 2007) have made considerable progress in implementation during the last year. Progress was evident across all six Principles.
• Signatories who participated for the first time in 2008 lag behind the earlier group. This is expected given that more recent signatories have had less time to implement responsible investment strategies.
• As in 2007, IMs recorded higher scores than AOs across the Principles. However, AOs are closing the gap in some areas.
• North American and European signatories retained their edge over signatories from Asia-Pacific and the emerging markets.

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Message from the Executive Directors of UNEP and the UN Global Compact

It has been just over two years since the launch of the Principles for Responsible Investment and engagement in the initiative continues to build at a thrilling rate. During the past 12 months the number of signatories has almost doubled to approximately 360 institutions. This represents an astonishing US$14 trillion-plus in assets.

Indeed, despite serious upheaval in global credit and financial markets during the past year, interest in environmental, social and governance (“ESG”) issues as they pertain to investment management shows no sign of slowing.

This surely reflects the fact that increasing numbers of investors – including fiduciaries and their money managers – recognize that ESG issues are material to the performance of their portfolio companies and other assets they hold, and therefore must be factored into investment analysis and decision-making. For investors, this is not an exercise in philanthropy but rather an effort to maximize long-range investment returns, while also contributing to societal goals.

It is this convergence – between the interests of business and finance, on the one hand, and those of the UN, on the other – that marks one of the most important developments of the 21st century. The process of globalization continues to bind societies and economies closer and closer together. Solving problems as diverse as climate change, water scarcity, poor labour conditions, and corruption – to name just several priorities – must be a collective effort.

As this Report on Progress shows, the PRI has created an international investor network that is acting both individually and collectively. The report presents a range of encouraging statistics with respect to implementation of the PRI by signatories. As well as areas for improvement.

At the same time, it is worth highlighting a number of special initiatives. In early 2008, a group of PRI signatories launched a high-profile interaction with companies in the UN Global Compact – urging more than 70 major corporations to improve their performance vis-à-vis disclosure, while praising a number of companies on their good performance.

United Nations Environment Programme Finance Initiative (UNEP FI) compiled a study on responsible property management, distilling best practices from leading PRI and UNEP FI signatories.

And on 17-18 June in Seoul, South Korea, the PRI will convene a major event – “Changing Landscapes” – in partnership with the UNEP FI and the UN Global Compact. The conference will provide a powerful platform in spreading the tenets of responsible investment in the Asian region.

Of course, much more work remains to be done. We encourage the investment community to intensify its efforts with respect to implementing the PRI and to continue to maximize synergies with the work of the United Nations – in particular through initiatives such as the UNEP FI and the UN Global Compact.

The United Nations stands by as a ready and able partner. We look forward to this shared journey.

Achim Steiner
Executive Director, United Nations Environment Programme 
Georg Kell
Executive Director, UN Global Compact

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