The Principles for Responsible Investment (PRI) may soon amend its code to reference the UN’s Sustainable Development Goals (SDG) to better ensure signatories invest in line with broader societal objectives.
The redrafting of the principles to reference broader societal objectives, which could occur at the same time as the introduction of a seventh principle focused on systemic risks, is expected to be one of the reforms to be put to the organisation’s 1,500 signatories later this year.
The PRI’s six principles, drafted more than a decade ago, currently state in the preamble that their application “may better align investors with broader objectives of society”.
But Kris Douma, director of investment practice and reporting at the organisation, said it was time to question whether that was enough.
“We now have a better idea what these broader objectives of society mentioned in the preamble mean because we have an international agreement on 17 goals,” he told IPE, referencing the SDG.
“So that gives us a better chance to look again at the principles and try to conclude in a general sense whether applying the principles contributed to the broader objectives of society.”
The SDGs, ratified by world governments last year, aim to eradicate hunger by 2030 and tackle matters of gender equality, but they also focus on sustainable growth and address the affordability of energy supplies.
Douma said discussions were in the very early stages and that the idea was presented to the organisation’s board only recently – ahead of discussions with stakeholders over the course of May and June, which will feed into a blueprint document to be published after the organisation’s annual conference, the PRI in Person, in Singapore in September.
“One of the ways to amend [the principles] – just one of them, there are probably many – is to say what’s currently in the preamble should be in the principles,” Douma said.
“So that is one of the things I’m currently thinking about. Should we take that phrase from the preamble [and] put it in the principles, and therefore make sure we do not just assume our principles will lead to the broader objectives of society but actually work towards that. But as I said, it’s only one of the options.”
A survey by ShareAction recently found that a lack of reliable data was stifling investor action on SDGs.