Submitted by: United Nations Global Compact
Categories: Corporate Governance
Posted: Jan 11, 2007 – 06:00 AM EST
Jan. 11 /CSRwire/ - January 11, 2006--The Principles for Responsible Investment (PRI) and the Enhanced Analytics Initiative (EAI) today announce a formal alignment and invite signatories of each initiative to join the other.
Both initiatives are industry-led, international collaborations aimed at achieving better long-term investment returns by evaluating the impact of extra-financial issues on company and market performance.
“Members of the EAI are broadly engaged with the fiduciary approach of the Principles and provide excellent examples of the practical implementation of key PRI principles”, said Donald MacDonald, Trustee of the BT Pension Scheme and Chair of the PRI Board. “It is clear that analysts have failed to address adequately extra-financial factors such as environmental, social and governance issues. EAI represents a serious effort to send long term signals to industry and deliver better research to investors”.
Principle 1 of the PRI commits signatories to incorporating ESG issues into investment analysis and decision-making processes. Principle 4 encourages signatories to promote acceptance and implementation of the Principles within the investment industry.
David Blood, Chairperson of the EAI, said:
“The PRI is very much aligned with the goals of the EAI and we welcome closer ties between the two initiatives. This collaboration demonstrates a shared and growing conviction among investment professionals that factors beyond traditional financial analysis are affecting performance of investment portfolios. A significant number of organisations are a member of both initiatives, and we believe there are strong synergies to be gained from working together.”
Apart from encouraging cross membership, the PRI and EAI will promote the sharing of best practice between their respective members and in particular will work on how environmental, social and governance issues can be better integrated into mainstream investment processes.
“The first step is to encourage the development and use of extra-financial research by a broader group of investors. But we also need to think more about how the research is being integrated into our investment processes. This partnership will help to do that,” said MacDonald.
About the Principles for Responsible Investment
The PRI were developed by a group of leading institutional investors in a process convened by the UN Secretary-General Kofi Annan and implemented by UNEP Finance Initiative and the UN Global Compact. The Principles recommend actions for incorporating environmental, social and governance issues into mainstream investment decision-making and ownership practices. There are now over 120 signatories, together representing in excess of US$6 trillion in assets.
For more information: http://www.unpri.org
UNEP Finance Initiative: http://www.unepfi.org
UN Global Compact: http://www.unglobalcompact.org
Enhanced Analytics Initiative
The Enhanced Analytics Initiative is an international collaboration between asset owners and asset managers aimed at encouraging better investment research, in particular research that take account of the impact of extra-financial issues on long-term investment. The Initiative currently represents total assets under management of €1.2 trillion (>US$1.6 trillion).
EAI seeks to address the absence of quality, long-term research which considers material extra-financial issues. The Initiative incentivises research providers to compile better and more detailed analysis of extra financial issues within mainstream research. Its impact depends on offering credible market incentives to interested and appropriate research agencies to encourage them to adapt their research process and to become more innovative.
For more information: http://www.enhanced-analytics.com
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For more from this organization:United Nations Global Compact