The Principles for Responsible Investment (PRI) has created a team focused on real economy policy insights and engagement, underscoring the investment industry’s interest in going beyond engagement with corporates.
The team will be led by Gina Hanrahan, who was previously senior climate policy specialist at the PRI, and sits within the global policy team led by Margarita Pirovska.
Speaking to IPE, Pirovska said the creation of the economic policy team has been three years in the making, after the PRI realised that it needed to dedicate more structured efforts to understanding how real economy policies affect the organisation’s signatories and to helping the latter engage on these policies.
“Many of our signatories increasingly recognise that policy decisions outside financial markets influence how risk is priced, where opportunities emerge and the scale of investment flows,” Pirovska elaborated in a statement.
“PRI’s economic policy work will aim to help investors navigate material reforms across markets and work to remove barriers to transition investment.”
She said there were an increasing number of real economy rules and regulations affecting investors, in particular in the EU. Examples include recent developments surrounding the Emissions Trading System, or the bloc’s deforestation regulation and different industrial policies.
In a social media post, Hanrahan said the economic policy team would build on existing initiatives such as the PRI-led sovereign climate change engagement programme and the policy track work of the UN-backed Net Zero Asset Owners Alliance.
Real economy policy work is a relatively new area for institutional investors and although more and more investors are embarking on it, some are also wary of it.
Commenting on Hanrahan’s post, Henrik Krasilnikoff Jeppesen, a senior member of the Janus Henderson Investors responsible investment team, said a move into real economy engagement by the PRI could raise governance fiduciary duty questions.
“Who determines which economic policies PRI endorses, and against what mandate?” he asked. “How will PRI ensure alignment across politically divergent jurisdictions, and separate policy research from lobbying? Signatories span very different fiduciary and political contexts.”
Hanrahan acknowledged the importance of these questions and said it was important that the PRI’s work was “rooted in signatory materiality and agency”.
Last month the organisation launched a consultation to inform its 2027-2030 strategy, saying the next phase of its agenda would require the PRI board to “make choices about where to focus resources, how we prioritise across issues, activities and markets, and how the PRI should continue evolving alongside investor expectations and market developments”.
