The Principles for Responsible Investment (PRI) has updated its reporting framework in an attempt to better align it with global reporting processes.
The PRI has the largest voluntary responsible investment reporting process in the world, although signatories are required to report annually. PRI reporting first took place in its current form in 2012 and is designed to provide PRI signatories with clarity around their responsible investment activity, as well as inform the PRI’s own work.
Ahead of this year’s reporting season, which opens mid-May, the PRI has now updated its framework to reflect changes in the industry.
“We have listened to signatory feedback and worked throughout 2022 to ensure this new iteration of the reporting framework is truly reflective of their needs and the changing issues confronting the responsible investment landscape,” said PRI chief reporting officer Cathrine Armour.
Feedback from signatories focused on the need to improve clarity, consistency and applicability of the framework, as well as the need to take reasonable steps to align more closely with other global reporting processes.
As a result, the updated framework has altered its terminology (in order to reduce confusion), restructured the reporting project to make it more logical, and reduced the granularity of data and prescriptiveness of some indicators in order to have broader appeal.
Crucially, it has attempted to better align with the evolution of global reporting, by mapping sections onto existing standards, such as those required by the Task Force on Climate-related Financial Disclosures.
“PRI believes the provision of a unified global reporting standard delivers important equivalency in responsible investment practices and accountability,” it said in a statement.
“This in turn brings greater alignment to the industry and contributes to its collective efforts to move the dial on key responsible investment issues.”
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A new addition to the framework is the introduction of voluntary indicators based solely on human rights.
In December last year, more than 220 investment firms representing $30trn in assets joined a PRI stewardship initiative, Advance, focused on human rights. Participating firms have agreed to develop human rights policies and human rights due diligence processes within one year of joining the initiative.
The human rights indicators addition to the PRI framework is based on the PRI’s 2020 paper Why and how investors should act on human rights.
Armour noted: “The inclusion of key indicators on issues such as human rights demonstrates how PRI is enabling change through our reporting process.”