Crafting a Comprehensive United Nations PRI Report

The United Nations-supported Principles for Responsible Investment (PRI) is a global initiative that seeks to encourage investors to integrate environmental, social, and governance (ESG) factors into their investment decisions. As part of this initiative, signatories are required to submit an annual report, known as the PRI report, which documents their progress and adherence to the six PRI principles. This essay will provide a step-by-step guide on how to create a comprehensive United Nations PRI report that effectively demonstrates an organisation’s commitment to responsible investing.

I. Understanding the Reporting Framework

Before drafting the report, it is crucial to understand the PRI reporting framework, which is designed to collect information on signatories’ responsible investment activities. The framework is divided into several sections, which cover different aspects of the organisation’s responsible investment process. The main sections include:

1. Organisational Overview: Provides general information about the organisation, its assets under management (AUM), and its responsible investment policy.
2. Strategy and Governance: Covers the organisation’s responsible investment governance structure, policies, and objectives.
3. Direct Investments: Addresses the organisation’s approach to integrating ESG factors into the investment decision-making process across various asset classes.
4. Active Ownership: Explores the organisation’s approach to engaging with investing companies and exercising voting rights on ESG issues.
5. Reporting and Assurance: Details the organisation’s approach to measuring and reporting on responsible investment performance, as well as obtaining third-party assurance.

Understanding these sections will help you collect the necessary information and effectively structure your PRI report.

II. Gathering Relevant Information

To create a comprehensive PRI report, start by gathering all relevant information about your organisation’s responsible investment activities. This may include:

1. ESG policies and guidelines: Collect your organisation’s existing ESG policies, guidelines, and any related documents that outline your approach to responsible investment.
2. ESG integration procedures: Gather information on how your organisation integrates ESG factors into its investment decision-making process, including any specific tools or methodologies used.
3. Active ownership activities: Compile data on your organisation’s engagement with investing companies and voting records on ESG issues.
4. Performance metrics and targets: Collect data on your organisation’s ESG performance and any specific targets that have been set to track progress.
5. Assurance and verification: Gather any third-party assurance reports or certifications that attest to your organisation’s responsible investment performance.

III. Drafting the Report

Once you have gathered all the necessary information, begin drafting your PRI report by following the structure of the reporting framework. Address each section and provide detailed responses to the questions and indicators, using the information you have collected.

1. Organisational Overview: In this section, provide an introduction to your organisation, including a brief description, the total AUM, and the types of investments you manage. Also, outline your responsible investment policy, highlighting its scope and objectives.
2. Strategy and Governance: Describe your organisation’s governance structure for responsible investment, including the roles and responsibilities of key individuals and committees. Discuss your ESG policies, how they are integrated into your investment strategy, and any objectives or targets you have set to drive progress.
3. Direct Investments: Explain how your organisation integrates ESG factors into the investment decision-making process for each asset class in which you invest. Include details on the specific tools or methodologies used, as well as any research or data sources that inform your assessments. Also, provide examples of how ESG factors have influenced investment decisions.
4. Active Ownership: Detail your organisation’s approach to engaging with investing companies on ESG issues, including the types of engagements, objectives, and outcomes. Provide information on your voting policy, including how you determine your voting decisions on ESG-related proposals and your voting record.
5. Reporting and Assurance: Explain your organisation’s approach to measuring and reporting on responsible investment performance. Include details on the metrics and targets used to track progress, as well as any processes in place for regular review and improvement. Discuss any third-party assurance or verification processes your organisation undergoes to validate its responsible investment practices and provide copies of relevant reports or certifications.

IV. Ensuring Transparency and Clarity

To create a comprehensive and effective PRI report, it is essential to ensure transparency and clarity in your responses. Use clear and concise language to describe your responsible investment activities, avoiding jargon and technical terms where possible. Be specific in your responses, providing quantitative data and examples to support your claims.

Additionally, ensure that you address each question and indicator in the reporting framework, providing sufficient detail to demonstrate your organisation’s commitment to responsible investment.

V. Review and Submission

Before submitting your PRI report, thoroughly review the document to ensure accuracy and completeness. Confirm that all sections have been addressed and that the information provided is up-to-date and accurate.

Consider seeking feedback from colleagues or external experts to ensure your report effectively communicates your organisation’s responsible investment activities.

Once you have finalised your report, submit it to the PRI through the online reporting tool. Be sure to adhere to the reporting deadlines, as failure to submit your report on time may result in a loss of signatory status.

Following submission, your report will be reviewed by the PRI, and you may receive feedback or requests for additional information.

VI. Leveraging Your PRI Report

After submitting your PRI report, consider how you can leverage the information to further enhance your organisation’s responsible investment practices and reputation. Use the report to identify areas for improvement and develop action plans to address these issues. Share your report with stakeholders, including clients, employees, and regulators, to demonstrate your commitment to responsible investment and enhance your reputation as a responsible investor.

Additionally, use your PRI report to engage with peers and learn from their experiences. Participate in PRI events and working groups to share insights, discuss best practices, and collaborate on initiatives to drive progress in responsible investment.

Conclusion

Creating a comprehensive United Nations PRI report is a crucial part of demonstrating your organisation’s commitment to responsible investment. By understanding the reporting framework, gathering relevant information, drafting a clear and transparent report, and leveraging the report to drive improvements, you can effectively showcase your organisation’s responsible investment practices and contribute to the global movement towards more sustainable and responsible investing.