A record number of US asset managers have signed up to the United Nations’ Principles for Responsible Investment (PRI) so far this year as sustainability becomes embedded in the investment process of more firms.
As of August 3, 116 US-based investment managers had become signatories to the PRI so far in 2020. This compares to 114 for the whole of 2019, and 67 for 2018.
The newest signatories to the PRI’s code – all of which joined in July – include Sixth Street, a $34 billion private markets specialist, and Victory Capital, which manages $129 billion across mutual funds, exchange-traded funds and other investment products.
Victory Capital CEO David Brown said: “Each of our investment franchises follows an approach to integrating environmental, social and governance (ESG) considerations that best suits its autonomous investment process or the objectives of its clients.
“Becoming a PRI signatory at the enterprise level broadens our commitment to responsible investing and enhances our ability to serve client needs while supporting the important mission and Principles of PRI.”
Victory Capital recently hired David Alt as director of responsible investing, a newly created role. The former head of responsible investing at PNC Financial Services has been tasked with establishing the company’s framework for “evaluating and monitoring” sustainable investment considerations. He also chairs the asset manager’s proxy voting committee.
By signing up to the PRI, asset managers promise to abide by six core principles:
- To incorporate ESG issues into investment analysis and decision-making processes;
- To be “active owners” of investment assets and incorporate ESG issues into ownership policies and practices;
- To encourage “appropriate disclosure” of ESG issues by companies and other entities in which they invest;
- To promote the acceptance and the implementation of the principles within the investment industry;
- To collaborate with other managers and stakeholders to promote and strengthen implementation; and
- To regularly and clearly report on ESG activities and progress.
The principles were launched in 2006 by a group of institutional investors seeking to construct an international framework for the development and promotion of socially responsible investment.
The PRI sets minimum requirements for remaining a signatory and engages with asset managers, asset owners and service providers if they are seen to fall short of these standards.
In total, 2,342 investment management companies from around the world have pledged support for the PRI, 525 of which are based in the US. A further 103 are Canadian.
The first US asset manager PRI signatories in 2006 included Calvert Research and Management, Domini Impact Investments, and Amalgamated Bank.