International alliance embarks on legal impact review

The research is backed by the PRI, the UNEP FI, the Generation Foundation and law firm Freshfields Bruckhaus Deringer

A group of international organisations have teamed up for a new research project to assess whether existing laws adequately ensure investors consider sustainability in their portfolios.

The research entitled A Legal Framework for Impact is backed by Principles for Responsible Investment (PRI), the UN’s Environment Programme Finance Initiative, the Generation Foundation and law firm Freshfields Bruckhaus Deringer.

Announcing the launch, the organisations said that the Paris Agreement and UN Sustainable Development Goals (SDGs) have ramped up investor awareness about global sustainability challenges, but “fundamental legal questions remain”.

“This project will provide recommendations that have not previously been formulated,” explained Eric Usher, head of the UNEP-FI.

“It presents a unique opportunity for investors to better align economies and industries in transition with the climate targets and the UN Sustainable Development Goals. We believe this project will be key to influencing investor practice.”

Usher’s comments were echoed by Fiona Reynolds, the chief executive officer of the PRI.

She added: “Investing for sustainability impact is the new frontier for responsible investment, with a stronger focus on how investment decisions have real world impact on ESG factors over financial materiality.

“This is an exciting and new area of work for PRI which will help investors across a number of markets ensure sustainability is a fundamental part of their investment practices.”

The research will consider legal frameworks in the EU, Australia, Brazil, Canada, China, France, Japan, South Africa, Netherlands, UK and US. The project is supported by a reference group of experts in the law, responsible investment and sustainability impact.