Sustainability: Why UNPRIs Are So Important?

Sustainability. The UNPRIs are the Principles for Responsible Investment – a global investment initiative – supported by the United Nations (UN).

It is an organization that offers principles as a guideline for investors to introduce ESG factors (environmental, social, and governmental) into their investment decision-making. 

They want to make it easier to understand the implications of the ESG factors on our lives. Another goal is to set up an international network for all of the signatories.

With this platform, the signatories can engage with each other, discuss problems and develop ideas together. 

All principles and goals are voluntary as well as not binding. There is no compulsion for firms to sign up as a signatory – it is their free choice. 

UNPRI – The Initiative:

The organization was launched in April 2006 and is truly independent. They are not associated with any government or with policymakers.

They engage with both as well as companies. They want to raise awareness about sustainability and sustainable investing as well as enhance returns and improve risk management with their work. 

What Is The Aim of The Principles? Sustainability?

There are six principles that introduce ESG to the daily business of signatories and need to be followed by them:

  • Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
  • Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
  • Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
  • Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
  • Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
  • Principle 6: We will each report on our activities and progress towards implementing the Principles.

Source: www.unpri.org

How Widespread Are The UNPRIs?

The UNPRIs show 4,375 signatories representing USD 121.3 trillion (SDG 164 trillion) assets as of 30th September 2021[1]. With that number approx. 23% of all assets globally are managed under the Principles for Responsible Investments.

Signatories are spread all over the world. The number of new signatories is growing, so the organization and the principles are getting more and more important every day. 

As sustainability and sustainable investment gain more importance worldwide, inexperienced investors benefit greatly from guidelines and the network which are offered by UNPRI.

Also, some policymakers start to launch new regulations about introducing sustainability into investment decision-making, for example, the EU introduced the EU taxonomy in 2020 which demands stronger requirements regarding sustainability every year.

Do you know what ESG stands for? Explore more here.

[1] https://www.unpri.org/download?ac=14962 (accessed on 27 December 2021)


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Writer: Annika Huck
Editor: Evelyn Tobing

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