So there’s been lots of talk in the past few days about the implications of the UNPRI’s delay of the new reporting framework for it’s signatories. They’ve been working on this new framework since 2011 and it was due to be launched for the 2013 reporting season. It now looks like it will now be delayed until 2014 — for the sceptics, that’s a 3-year time period without reporting accountability.
So what does all of this mean? Should we be reading something more into this move? According to Responsible Investor “signatories have raised issues about data security, client confidentiality and the complexity of the reporting process, despite the PRI’s attempts to lighten the burden in recent years. But much resistance appears to have coallesced around whether the reporting process implies that there is a right way to do responsible investing.”
All of this causes me to ask some questions:
- How can the PRI actively pursue disclosure and transparency through engagement with publicly-listed companies if their own signatories are not willing to do the same?
- Doesn’t one need to walk the talk to be credible?
- With more than 1100 signatories are we at the critical mass where we no longer truly need the reporting?
- Have we already hit the tipping point and therefore, does it really matter?
- Does this ultimately slow down the amount of pressure on public companies with regards to disclosure and transparency?
Only time will tell but one thing is for sure, this is a clear signal to watch. They’ve succeeded in putting through mandatory fees (which no one expected to hold), so perhaps its best to take a wait and see approch! Let’s see if signatories continue to grow. Perhaps the choices that the PRI is making now to delay is, in fact, best for the longer-term success of it’s goals.
In the end, I’ve always said I feel that the true opportunity in this movement towards responsible/sustainable investing is to mainstream the integration of ESG factors into traditional investing. As always, the success of any fund is based upon the manager and their particular style. With such, doesn’t it then seem normal then that the reporting process needs to reflect individual style too?