UN Principles for Responsible Investment (PRI)
The UN Principles for Responsible Investment (PRI) is an international initiative that encourages investors to incorporate environmental, social, and governance (ESG) factors into investment decision‑making. Launched in April 2006 with support from the United Nations, the PRI brings together asset owners, investment managers, and service providers who commit to responsible investment practices.
Core idea
PRI’s core philosophy is that ESG considerations are financially and ethically relevant to long‑term investment performance. Rather than treating environmental and social impacts as externalities to be ignored, PRI promotes their systematic integration into investment analysis, ownership practices, disclosure, industry engagement, collaboration, and transparency.
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The six principles
Signatories agree to adopt six voluntary principles:
- Incorporate ESG issues into investment analysis and decision‑making processes.
- Be active owners and integrate ESG into ownership policies and practices.
- Seek appropriate disclosure on ESG issues from the entities in which they invest.
- Promote acceptance and implementation of the Principles within the investment industry.
- Work together to enhance effectiveness in implementing the Principles.
- Report on activities and progress toward implementing the Principles.
How PRI operates
- Membership: Organizations become signatories by committing to the six principles.
- Reporting: Signatories file regular reports on policies, practices, and progress, creating a framework for transparency and accountability.
- Collaboration and guidance: PRI provides tools, research, and guidance to help investors integrate ESG into processes and to facilitate collective engagement.
Scale and impact
PRI signatories collectively manage a substantial portion of global capital—responsible for over $121 trillion in assets under management. Founding and prominent signatories include major public pension funds and institutional investors, underscoring PRI’s influence across markets and asset classes.
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Example in practice
A PRI signatory analyzed proposed EU anti‑pollution legislation and its potential impact on the automotive supply chain. The analysis led the investor to rebalance exposures in that sector and to revise valuation assumptions for a major battery manufacturer, reflecting an expectation of accelerated electric vehicle adoption and increased battery demand.
Limitations and considerations
- Voluntary nature: PRI relies on voluntary commitments and self‑reported disclosures, which can lead to variation in the quality and comparability of reporting.
- Implementation differs: Signatory approaches to ESG integration and active ownership vary by organization, strategy, and market.
Further reading
For detailed guidance, reporting frameworks, and the PRI signatory directory, consult materials published by the Principles for Responsible Investment (PRI).