Improvements have been made to the clarity, consistency, applicability of reporting as well as reducing the ‘reporting effort’ for PRI signatories
Principles for Responsible Investment (PRI), the UN-backed investor initiative, has published its 2023 Reporting Framework aimed at improving how signatories report on their responsible investment activities.
The new framework includes an overview and structure guide to help signatories understand the reporting resources available to them and prepare their responses ahead of the start of the reporting cycle, which opens in mid-May.
The PRI’s more than 5000 signatories – including asset owners, asset managers and financial services providers – commit to reporting their activities annually upon signing the PRI’s principles. This latest iteration of the reporting framework takes into account feedback from the 2021 pilot reporting year.
In response to questions from Impact Investor, Cathrine Armour, chief reporting officer at the PRI, said the 2023 framework represented a significant step forward in the evolution of PRI’s reporting process.
“[We] have listened carefully to signatories’ feedback to ensure the framework is as straightforward as possible to use, that it gives signatories the chance to showcase their activity in the most suitable way, and that it aligns, where appropriate and possible, with other regulatory reporting standards,” she said.
She noted that the PRI’s reporting provided important insight for its signatories, allowing them to measure their own progress and track against their peers, as well as for the wider sector to drive transparency and help identify areas of success as well as where more work was needed.
Signatory feedback
The PRI said signatory feedback from the 2021 pilot reporting highlighted improvements needed to be made to the clarity of the reporting framework, which led to a review of the terminology used and a revision of the questions and response options to reduce ambiguity.
Concerns were also raised over the consistency and applicability of the reporting, in response to which the PRI said it had “adjusted logic paths or assessment criteria” to ensure that certain groups of signatories were not penalised for not being able to adopt certain practices that were not applicable to them.
The PRI said it had also restructured certain sections to better align the framework with other industry reporting frameworks such as the Taskforce on Climate-related Financial Disclosures, the Taskforce on Nature-related Financial Disclosures and the International Sustainability Standards Board.
The new framework has also reduced the granularity of data requested and decreased the overall number of indicators companies are required to report on, among other things, to reduce the reporting effort for signatories.
Asked whether this did not risk reducing the quality of the data collected, Armour said: “Our work in areas such as reducing the number of overall indicators should not be taken as a ‘softening’ of reporting, rather, this has been about tightening up reporting in order to reduce duplication and create efficiency.”
Impact investors
Speaking to Impact Investor, Andreas von Angerer, head of impact for Swiss impact investors Inyova, a PRI signatory, said he hoped the new framework would bring “a lot of enhancements with regards to the quantity and quality of data provided by each signatory”.
“The reporting for PRI used to be a heavy lift, even for larger institutional investors. Nonetheless, this can be a useful task to reflect on everyone’s performance and commitment towards responsible investing,” he said. “We hope that the new framework will make it easier to identify best practices that will motivate others to enhance their approach and keep making progress.”
Von Angerer said that for impact investors aiming to generate impact through active ownership, the reporting framework was a valuable source of information in terms of identifying what to address when engaging with financial institutions.
“The new framework will make it mandatory for signatories to report publicly on their progress in implementing the principles. This will allow various stakeholders to see the progress and make demands, or push for change, if deemed insufficient,” he added.
