Friday 20/09/2019

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Principles for Responsible Investment of the United Nations: 10 years already!

Responsible Investment Strategist

The Principles for Responsible Investment, sponsored by the United Nations, have now been in place for ten years. Given the impressive growth in the number of signatories and the assets under management represented, the six Principles are clearly a success.

 

Obligatory reporting

As a reminder, the six principles aim to advocate best practices in order to encourage the adoption of environmental, social and governance (ESG) criteria, and to foster a more sustainable financial industry geared towards the long term.

Although these principles are guidelines rather than obligations, signatories to the PRI have been required to report on the progress of the adoption of the principles within their organisation for two years now. This obligatory reporting has been a first achievement for the PRI as it gives them a certain weight. Moreover, the assessment done through the PRI based on this annual reporting also makes it possible to shed some light on the strengths and weaknesses of the principles’ implementation. The signatory is informed about the progress being made in implementing the principles as compared to other signatories of a similar size, or to signatories which endorsed the principles in the same year, as well as about potential strategies to improve the process.

Why our commitment to the PRI has proven to be a turning point in our responsible investment positioning and strategy?

The first principle has encouraged us to adopt a clear and formalised responsible investment policy. Moreover, it prompted us to integrate more environmental, social and governance criteria into our financial analyses.

The second principle has also led to increasingly formalised shareholder responsibility and to the adoption of our voting policy in 2013. As such, we currently vote in more than 450 companies in which we are shareholders, in Europe and North America. In keeping with our commitment to advocate the PRI we have also put in place an engaged dialogue with companies in the framework of our voting policy, in particular for subjects relating to the independence of boards of directors, the transparency of information, anti-takeover mechanisms (poison pills) and equitable remuneration schemes.

Also with regard to dialogue and promoting the PRI we warmly welcomed the opportunity to join other signatories on a collaborative engagement platform, in particular for corruption prevention and the transparency of clinical trials in the pharmaceutical sector.

For two years now, we have been reporting on the progress made in implementing the principles within our management process. We are proud to publish our annual assessment as for two years we have been granted an A rating, a score that is better than the median for asset managers (B). We also benefit from a superior score in bond management as our approach of integrating sustainability criteria into government bond management is clearly something which makes our company stand out.

A greater impact

Today, the PRI are calling on their signatories to define the objective of the next ten years. The first objective was to raise awareness among finance professionals about the importance of ESG issues. The coming objective, called ‘Moving from awareness to impact’, aims to increase the impact and tangible results in order to achieve sustainable and equitable economic development. The projects and initiatives will be presented in early 2017 based on proposals made in the message to the signatories. Specific improvements have already been identified, including increased transparency about the objectives and their ambitions and the aim to have a greater impact on the ‘real world’. Another idea focuses on the integration in parallel of the United Nations sustainable development goals into the PRI.

By consulting its signatories, the PRI once again aim to raise awareness among finance professionals in order to foster a more sustainable and long-term financial industry. We can only be happy about that!

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