There is not enough transparency surrounding the results of the Principles for Responsible Investment’s (PRI) annual assessment of asset manager signatories, analysts at Germany’s Scope Group have said.
In a report published by Scope Analysis – a part of Scope Group that provides ratings and research on investment funds and asset managers – they called on the PRI to weigh in more on signatories to make the results available ideally to all market participants and in full, or as comprehensively as possible.
They noted that not all of the information that flowed into PRI’s assessment was publicly accessible, and it was up to signatories to decide if and in what form to communicate about the outcome of the assessment.
As a result, there were considerable differences between asset managers’ approach to publication of results, with implications for comparability.
Many do not publish their results at all, some only partially publish their results, and only a fraction publish the entire PRI assessment report, the analysts said.
There has been strong growth in the number of PRI signatories recently.
The Scope analysts said it was positive that signatories were subject to an annual assessment by the PRI, but that they were critical about the fact that the PRI’s appraisal was solely based on a self-assessment by signatories and that so far there was no independent verification of the data.
Many PRI signatories were now achieving top marks in many of the different areas of the PRI assessment, the analysts noted.
In the report, they said that only complete transparency would allow all market participants to judge how individual PRI signatories implement or ‘live’ the topic of responsible investment, and how comprehensively and successfully they take account of ESG aspects.
The PRI has a data portal through which asset owners can find asset managers’ reports, but the analysts said this was not ideal as solution because signatories had to request access to be able to see other signatories’ reports, and the targeted entity had to approve the request.
PRI: Steps taken in relation to 2019 assessment
A spokesman for the PRI said it welcomed feedback regarding all aspects of its operations, and explained that although it relied on signatories to report, various processes were in place to increase confidence in the data.
These included a reporting tool that asks signatories to adjust responses when inconsistences in data are spotted. The PRI also analysed and compared the data, and after reporting it validated the data checking for contradictory responses, major year-on-year changes or outlier data points.
He also noted that PRI had taken several steps to validate and test the calculations and results of the 2019 assessment, including – as noted by the Scope analysts – engaging PwC to assist it in reviewing its processes following the 2018 PRI assessment and reporting.