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20, January 2009, Bangkok James Gifford, PRI Executive Director Narina Mnatsakanian, Project Manager, PRI/UNEP FI PowerPoint PPT Presentation

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20, January 2009, Bangkok James Gifford, PRI Executive Director Narina Mnatsakanian, Project Manager, PRI/UNEP FI. 0. Agenda. Initiatives mapping Emergence of responsible investment Why is responsible investment relevant for companies? Principles for Responsible Investment

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20, January 2009, Bangkok James Gifford, PRI Executive Director Narina Mnatsakanian, Project Manager, PRI/UNEP FI

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20, January 2009, Bangkok

James Gifford, PRI Executive Director

Narina Mnatsakanian, Project Manager, PRI/UNEP FI


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  • Initiatives mapping

  • Emergence of responsible investment

  • Why is responsible investment relevant for companies?

  • Principles for Responsible Investment

  • Collaborative engagement

  • Global Reporting Initiative

  • Responding to the Crisis

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Complimentary initiatives






Reporting Framework



(GRI, Sustainability


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Emergence of Responsible Investment

First there was:

  • Traditional negative/positive screened funds

    The PRI is a culmination of:

  • Shareholder engagement

  • Corporate governance movement

  • Clean tech and sustainable venture capital

  • Materiality of ESG issues / enhanced analysis, e.g. Climate change

  • Systemic issues (response to the crisis)

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Why is RI relevant for companies?

  • Access to capital - appropriate ESG disclosure can help companies to get access to funds

  • Equity pricing– investors integrate material ESG issues it their stock selection

  • Shareholder engagement – long term investors engage with investee companies on ESG issues

  • Access to markets, license of operate

  • Increasing demands for disclosure

  • Reputation

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Investor perspective

  • ESG issues can impact investor returns especially in the long-term and, therefore, deeper analysis should result in better investment decisions

  • Companies that manage complex ESG issues well tend to be well managed overall

  • Strong ESG performance by companies can result in new opportunities and reduced risks

  • Investors can play an important role in promoting good corporate practice within their portfolio companies

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Factoring of ESG issues into investment decisions

  • Major global brokerage firms assessing impact of ESG issues

  • Investors integrate these findings into their mainstream investment decisions

  • Brokers with ESG assessment capabilities include

    • Merrill Lynch, Morgan Stanley, Nomura, RBC Capital Markets, Société Générale, Standard Chartered, UBS, Vigeo, Wachovia Securities, WestLB, Credit Suisse, Deutsche Bank, Dresdner Kleinwort, Goldman Sachs HSBC, ING, Innovest, JPMorgan, ABN AMRO, Citigroup

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Rising investor expectations

  • Investors are increasingly considering ESG issues for a larger number of emerging markets companies, including Thailand

  • Emerging market companies need to become world leaders in CSR reporting and performance

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About the PRI

  • PRI is a tool kit for integrating ESG issues into mainstream investment practices and across asset classes

  • PRI is a forum for discussion and concrete action on long-term risk issues and value drivers

  • Signatories sign up to six aspirational best practice principles which

    • reflect a broad and long term understanding of materiality

    • are grounded within the bounds of fiduciary duty

    • can be applied across mainstream portfolios

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Supported by the Secretary-General

“I applaud the leadership of the institutions that have committed themselves to this undertaking, and urge other investors around the world to join this historic effort.”

Ban Ki-moonUN Secretary-General

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Over 470 signatories, US$18 trillion AUM

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Signatories include

  • CalPERS, USA

  • APG and PGGM, Netherlands

  • Norwegian Government Pension Fund

  • British Telecom and USS, UK

  • Government Employees Pension Fund of South Africa

  • PREVI, Brazil

  • Mitsubishi UFJ and Sumitomo Trust, Japan

  • Government Pension Fund of Thailand

  • Colonial First State, Fortis Investments, Schroders and HSBC

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The Principles

We aspire to

1…incorporate ESG issues into investment analysis and decision-making processes.

2…be active owners and incorporate ESG issues into our ownership policies and practices.

3…seek appropriate disclosure on ESG issues by the entities in which we invest.

4…promote acceptance and implementation of the Principles within the investment industry.

5…work together to enhance our effectiveness in implementing the Principles.

6…each report on our activities and progress towards implementing the Principles.

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PRI Clearinghouse

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Standardized reporting on ESG issues

Signatories are promoting Global Reporting Initiative (GRI)

Enhancing investee company ESG disclosure

Singatories ask investee companies to disclose performance around social, ethical and environmental issues. Where reporting is inadequate, they actively engage with companies to seek improvement

Principle 3: Corporate disclosure

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Collaborative engagement

  • Corporate Governance remains the most common topic for collaboration

  • Biodiversity Toolkit– a collaboration to assess risks and opportunities relating to biodiversity and ecosystem services in the food, beverage and tobacco sectors in Brazil (e.g. clean water, deforestation, regulated climates)

  • Singapore and Hong Kong Engagement Initiative – encourages listed companies to enhance their corporate responsibility. Opportunity to be included in the FTSE4Good Index

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Emerging Markets Disclosure

  • Projectencourages companies in emerging markets to provide better information on their management of ESG issues

  • Initial countries covered: Brazil, China, India, Russia, South Africa, South Korea

  • Lead Investors: HSBC; Boston Common Asset Management, Calvert, PREVI, Government Pension Fund of South Africa

  • Current status: active engagement with companies

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Seoul Initiative

  • Seoul Initiative 52 signatories with USD 4.4 trillion AUM launched an initiative to call on 9,000 listed companies to participate in the United Nations Global Compact

  • Government Pension Fund of Thailand was one of the signatories to this initiative

  • Investors wrote to over 80 Thai listed companies encouraging them sign to up to the Global Compact. These letters will be followed up by investors

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Global Reporting Initiative (GRI)

  • “Transparency, accountability, reporting and sustainability. The GRI network is a meeting place to converge and accelerate these issues”

  • GRI has pioneered the development of the world’s most widely used sustainability reporting framework and is committed to its continuous improvement and application worldwide

  • This framework sets out the principles and indicators that organizations can use to measure and report their economic, environmental, and social performance

  • Investors are increasingly asking their investee companies to use GRI as a reporting framework

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Responding to the crisis

  • A focus on governance and good corporate practices will help build trust and confidence in markets and ultimately generate better returns for companies and investors

  • Enhance transparency, accountability and disclosure

  • Deeper analysis and better risk management by companies and investors

  • Investors will monitor companies more actively

  • Investor will engage in public policy dialogue

  • Collaborative investor action

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Email: [email protected]

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