PRI reveals ‘leading’ investment managers in climate change reporting

PRI names 36 groups demonstrating reporting 'excellence' and winners of PRI Awards 2020

The UN-supported Principles for Responsible Investment (PRI) has identified 36 investment managers and assets owners as ‘leaders’ in their responses to the PRI Reporting Framework.

The list of firms in the Leaders’ Group, which is not ranked, features 16 asset owners and 20 investment managers that have demonstrated “a breadth of responsible investment excellence” and have excelled specifically in this year’s theme: climate reporting.

The full list includes Allianz SE, AXA Investment Managers, Candriam, Legal & General Investment Management, Manulife, Natixis, Neuberger Berman, Payden & Rygel, Robeco, State Street Global Advisers, Federated Hermes and more.

CEO of the PRI Fiona Reynolds explained: “We produced our second Leaders’ Group this year, with the theme of climate reporting. Climate change has long been a priority for our signatories and is a strategic focus for the PRI; championing climate action is a key pillar of our Blueprint for responsible investment.”

In 2018, the PRI introduced indicators based on the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) recommendations into the Reporting Framework, and last year the PRI confirmed that reporting against TCFD-based indicators would become mandatory in 2020.  

“Supporting the adoption of the TCFD recommendations is a high priority for the PRI,” said Reynolds, “as they provide a global framework for translating climate information into financial metrics.”

The PRI used “robust methodology” based on signatories’ reported data, focusing on responses to climate change indicators, to come up with the list of 36 leaders.

“These leaders have demonstrated a strategic approach towards climate disclosure, as identified by the PRI, and excellence in responsible investment across their portfolios,” added Reynolds.

Advanced practices of the leaders were identified as:

  • having a robust governance structure for climate-related issues;   
  • looking at climate risks and opportunities over different time horizons;
  • and using a robust set of tools to manage climate-related risks and opportunities. 

Reynolds also said: “We want signatories to feel empowered to respond to the challenges presented by climate change. To address the much-needed shift in signatory behaviour to incorporate climate risks, we made the decision to only showcase those signatories truly going above and beyond on their PRI reporting on climate.

“We recognise that the Leaders’ Group is not an exhaustive list of signatories with leading climate reporting practices, as it is fully based on the investor responses to the 2020 climate indicators in the PRI Reporting Framework, and does not take into account TCFD reports investors may have published separately. 

“We hope that this year’s Leaders’ Group can be a source of knowledge for other signatories wishing to address climate-related risks and opportunities.”

See also: – Q&A with PRI CEO Fiona Reynolds

Jonathan Bailey, head of ESG investing at Neuberger Berman, responded to the inclusion of the firm: “We are delighted that the PRI has identified Neuberger Berman as a leader for our efforts to assess, manage and disclose climate risk and opportunity across our investment strategies. We have embedded climate scenario analysis into our investment processes across asset classes for several years now.

“Physical and transition climate risk has been a focus of our engagement efforts with portfolio companies, including our innovative NB25+ advance proxy voting initiative. And at the urging of our portfolio managers, we have formalized, and are in the process of implementing, an exclusion policy on thermal coal mining and coal generating utility expansion because our investment professionals believe there is no economic case for establishing new direct investment in these assets.”

Meanwhile, Joan Payden, president & CEO of Payden & Rygel, said she Is proud the firm is “recognized as one of only four US 2020 PRI Leaders.”

“We are committed to acting in the best long-term interests of our global client base and are proud to prudently align our investment process with broader societal objectives.”

PRI Awards

The PRI also announced the full list of winners for the PRI Awards 2020. These independently judged awards aim to highlight innovation and impact among the PRI signatory base. Almost 120 entries were received from signatories across 25 countries. From these, five entries per category were shortlisted, which were then whittled down to one winner per category.  

The winners of the PRI Awards 2020 are:

  • ESG incorporation initiative of the year:  

FTSE Developed TPI Climate Transition Index – aligning a global equity portfolio with the climate transition, submitted by FTSE Russell, with support from Church of England Pensions Board & Transition Pathway Initiative  

  • Stewardship project of the year:  

Investor Mining and Tailings Safety Initiative, submitted by Church of England Pensions Board, with support from The Council on Ethics of the Swedish National Pension Funds  

  • ESG research report of the year:  

2020 ESG Trends project: What are the big challenges for the new decade? submitted by MSCI  

  • Real-world impact initiative of the year:  

Green for Growth Fund, submitted by Finance in Motion  

  • Emerging markets project of the year:  

Agile & Comprehensive ESG Management System, submitted by Abris Capital Partners   

PRI CEO Reynolds said the body will continue to look at how to recognise the efforts of signatories: “We will continue to look at how we can progress these initiatives and further showcase leadership as part of our next three-year strategy. For now, I would like to thank those signatories that have contributed to these initiatives this year and who continue to show true leadership on responsible investment. Let’s keep the momentum going.”

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Natalie Kenway

Natalie is global head of ESG insight for ESG Clarity and has been an investment journalist for 16 years. She won Editor of the Year at the Aviva Investors Sustainability Media Awards 2021, and was Winner...