The Principles for Responsible Investment has fleshed out the details of the mandatory elements of its revised reporting framework, as it attempts to “demystify” the process ahead of its rollout later this year.
Last month it was reported that the UN-backed initiative was overhauling both the reporting process and the disclosure requirements to make them more transparent and accountable, following a pilot and consultation period.
From October it will be compulsory for signatories – of which around 30 are UK-based asset owners largely comprising pension schemes – to publicly disclose 40 per cent of the overall framework, while the assessment methodology will be trialled over the next two years.
In a guide issued to signatories alongside the update last week, the PRI stated: “We know that some signatories have limited resources and are worried about the time that reporting may take. We hope this guide will help to demystify the content of the framework.”
It added it would also be making a data collection tool available on its website from June. “But the new framework is about more than just reporting,” said James Gifford, executive director at the PRI.
“We know that what gets measured also gets managed, and many of our signatories find that half the rewards can be found not in the final report but in the process of reporting and the discussions this stimulates, within their own organisations and with external managers and consultants.”
Scottish Widows Investment Partnership has been heavily involved in the revision of the PRI reporting framework.
Head of sustainability Craig Mackenzie said the move to detailed asset class reporting and mandatory public disclosure will give signatories a much richer basis for benchmarking, adding it would “give asset owners much better information on which to compare managers when awarding mandates”.
“I'm pretty certain the new reporting framework is going to drive increased interest in the PRI,” he added.
Franklin Templeton is one of the latest organisations to adopt the principles, announcing earlier this month it had signed up to the PRI.
“We recognised that the approaches of our investment teams were in line with many of the principles already,” a spokesperson said.
The reporting framework changes follow the widening of signatory representation on its advisory council in 2011, to include investment managers and service providers as well as asset owners.
Stephen Millar, managing director of investment manager Skagen, which signed up to the PRI in the autumn, said its decision was in part influenced by this move as it “meant fairer representation and gave it real teeth”.
He added: “In practical terms we felt that by including asset managers and service providers, the PRI better encompassed the views of the whole investment industry, not only the asset owners.
"In our view this was important to increase the breadth and legitimacy of the initiative.”
