Earlier this year the United Nations announced it was going to get tough on compliance with its Principles for Responsible Investment Initiative. It has now announced that five financial institutions have been delisted as signatories from the Principles  for not participating in the Initiative’s annual Reporting and Assessment process. Participation in the annual survey is mandatory for asset owner and investment manager signatories, though there is a grace year to allow new signatories to learn from their peers and determine how best to monitor and report their progress in implementing the Principles. A total of 284 signatories participated in this year’s survey, the aggregate results of which can be found in the PRI Report on Progress, 2009. This represents a 98% response rate from those signatories required to participate this year.

The institutions delisted were: DESBAN, Christopher Reynolds Foundation, Foresters Community Finance, Oasis Group Holdings and Trinity Holdings. In addition, three institutions voluntarily left the Initiative – Mennonite Mutual Aid (MMA), New York State Teachers' Retirement System (NYSTRS) and Rapaki Property Group – while 93 new signatories joined this calendar year. There are now 573 signatories to the PRI, including 182 asset owners, 282 investment managers and 109 professional service partners.

James Gifford, Executive Director of the PRI said, “Overall, this is a good news story. Given the financial crisis, we are delighted that so few signatories were unable able participate in the reporting and assessment process. We understand that participation in this survey can be time consuming, and some funds have found it difficult to allocate those resources, particularly during these times. We would welcome them back at any time. It should be noted that the PRI does not have prescriptive requirements on how responsible investment should be implemented. Signatories are, however, required to participate in the annual Reporting and Assessment process as a minimum condition of remaining a signatory.”

The PRI initiative also announced that over the next year, it will consult its signatories on a transparency framework that would become part of the mandatory reporting and assessment process from 2011.

Mr Gifford continued, “The PRI initiative will be working with signatories over the next year to develop appropriate indicators for public reporting of responsible investment activities from 2011. We would not expect signatories to disclose commercially sensitive or legally confidential information. But signatories should be sufficiently transparent to ensure their clients, customers, members and other stakeholders have a clear sense of their responsible investment processes, activities and capabilities. The aim will be to roll this transparency framework into the annual Reporting and Assessment process which signatories are already undertaking.”

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