The UN Principles for Responsible Investment (PRI) is gearing up for the first phase of a freshly formalised programme of work on creating a sustainable financial system.

The sustainable financial system (SFS) programme was presented to US PRI signatories at an event in New York late last month.

It represented a formalised framework for its efforts to “better align the financial system with sustainable and equitable economies”.

The PRI consulted on this last year and the SFS programme “really started to come together this year,” a PRI spokeswoman told IPE.

The New York event provided “a taster” of the programme, with more information about it to be provided in the blueprint that the PRI will publish towards the end of this month or early in May, added the spokeswoman.

The blueprint will set out the PRI’s strategic objectives and direction for the next 10 years.

The first phase of the PRI’s programme is divided into four projects intended to remove “blockages” in the financial system around sustainability. The projects focus on areas in which the PRI thinks investors can help change the system.  

The four projects address:

  • investment trustee readiness for a sustainable system;
  • asset consulting services;
  • macro-economic risks; and
  • industry dialogue about desired outcomes.

According to Nathan Fabian, director of policy and research at the PRI, the aim of the trustee readiness project is “to influence the dialogue taking place in investors’ boards and the decision-making frameworks they use, so as to build confidence that the consequences of financial system activity are relevant to core investment duties”.

The PRI will develop a framework to ensure system consequences are discussed in board meetings, as well as tools for trustees to implement such a a framework, said Fabian.

The asset consulting services project, he said, was designed to ensure that asset allocation and portfolio management advice systematically considered sustainability or “effects on the system”.

The third project aimed to engage investors on macro-economic risk, for example by conducting research on the relationship between social issues and economic issues.

The fourth project aimed to examine desirable outcomes from financial system activity in relation to the environment, communities, workers, and savers. The PRI “will conduct a dialogue between signatories and experts” on this, Fabian said.