PRI SGM Summary - Reporting 2025, Progression Pathways & More
The PRI held its annual Signatory General Meeting on 10th September 2024. The focus of the meeting was the outcome of the PRI’s strategy consultation and setting out the 2024-2027 Strategy. There are now almost 5,500 signatories, representing $128tr in AUM.
Four key pillars the PRI’s 2024-2027 strategy will focus on:
Driving signatory progression on responsible investment while streamlining PRI mandatory reporting
Strengthening regional RI ecosystems in both mature markets and emerging and developing economies
Amplifying signatory impact by supporting and leading collaborative initiatives
Strengthening the enabling environment for RI by influencing government and multilateral policy and financial market practices
Key highlights below on developments that are most relevant to you.
Reporting
Reporting in 2024 focused on improvements since 2023 e.g. technical issues, pre-filling. These elements will be maintained for 2025 reporting.
The PRI were delighted to see high reporting levels in 2024 with the majority of voluntary reporters choosing to do so.
In 2025, all investment manager signatories who have passed grace period will be required to complete an amended, mandatory SLS module and indicate which other reporting requirements they are in scope for (e.g. TCFD). Further modules will remain voluntary.
Reporting remains completely voluntary for those in their grace period.
Progression Pathways
Progression Pathways are being codesigned with signatories and the PRI continue to develop the initiative as their key framework going forward.
The goal is to develop a blueprint to support signatories in advancing RI practices in a more tailored way.
The SGM demonstrated an early prototype of the framework which showed:
New functionality on the website to sign in, allowing signatories to access information on a personalised dashboard, directing you to tools and resources that are most relevant to you based on your pathway and stage.
Signatories can align their progression any of three pathways:
A: seeking to integrate ESG factors
B: seeking to address drivers, or
C: seeking to have impact
Signatories are not locked into one pathway and can choose the one that best fits their strategy.
Each pathway contains 8 ‘pillars’ which are the key elements of responsible investment required for that pathway, under those are a series of practices each of which are assigned a level depending on how progressed they are.
Example pathway:
Pathways -> Pillars -> Practices -> Levels
Each pathway will contain 8 pillars: policies & governance, investment analysis, setting sustainability targets, collaboration, engagement with investees, engagement with policy makers, engagement with clients and investment decision-making.
A signatory in Pathway B, looking at the Collaboration pillar might then consider how they can use Endorsement (a level 1 practice), alongside Active Participation (Level 2) and Investor Networks (Level 3) to progress their responsible investment.
The progression pathways will also include:
- Access to tools & guidance relevant to the practice area.
- Progression reporting relevant to the pathways and practices selected.
The PRI is projecting that the pathways will be available to use in 2025, with foundational reporting available in 2026. More in depth progression reporting will be available 2027-2028. Details of foundational and progressional reporting continue to evolve.
Other key initiatives PRI is focused on:
Sustainable Systems: The PRI has launched of 3 new reference groups for signatories: Human Rights, Circular Economy, Nature
There are now >1000 signatories participating in investor initiatives and collaboration
The Net Zero Initiatives continue to develop
Net Zero Asset Owner Alliance (89 asset owners, representing $9.5 tr)
Net Zero Asset Managers Initiative (315 signatories representing $57tr) – 98% have set interim targets for 2030 or earlier.
In June this year the PRI launched Spring – a nature initiative – which 128 investors representing $10tr endorsed in its first 3 months.
Advance, the PRI’s human rights initiative has now been endorsed by 265 investors representing $35tr.
The PRI will be prioritising collaborative initiatives in the new strategy.
There will be a regional conference, similar to PRI in Person, in Europe in May 2025 with further details to follow.
Anti-ESG Challenge
PRI acknowledges this is a growing challenge, particularly in US market. This is being driven by those pushing back against efforts to get companies to think about their carbon footprint, as well as by fossil fuel companies whose businesses are being impacted by investors focusing on climate change.
This sector is funding a deliberate political campaign to stop investors from collaborating in this space. The PRI is continuing to engage with policy makers in the US to help enable a more supportive political environment.
PRI is providing support to signatories, to make sure all collaborative initiatives are on strong legal foundations, whilst also recognising that transitioning the economy to a lower carbon environment is going to impact certain communities and sectors.
The PRI continues to emphasise that climate risk is financial risk and that investors have a fiduciary responsibility to consider it in their investment practices.
Governance
Board elections are coming up – all signatories will receive notification to vote later from 17th September – 26th November 2024.
Next Steps
Clearly there is a lot of changes on the horizon for PRI signatories and we plan to help you with your alignment / gap analysis against the progression pathways once full details are released in 2025, and, to assist with the transition towards progression reporting beyond that. If you have any questions, don’t hesitate to reach out.
Danesmead ESG is also pleased to welcome our newest team member – Corinne Tomsett. Corinne joined us directly from the PRI and will be an invaluable resource to our clients through this transition.