International Funds Worth $4Tn Endorse UN Principles

Investment funds backing the Principles for Responsible Investment have doubled to reach more than $4 trillion as asset owners and fund managers joined the European launch of this new initiative at the Palais Brongniart in Paris yesterday.

It is expected that further funds will pledge support for the Principles, which were officially launched by United Nations Secretary-General Kofi Annan at the New York Stock Exchange on 27 April.

At the Paris event, the heads of 18 major institutional investors from nine countries, represented more than $2 trillion in assets, and signed up to the Principles. They joined a group of 32 institutional asset owners representing the original $2 trillion which backed the Principles during the international launch in New York last week.

The Principles were developed during a nearly year-long process convened by the UN Secretary-General and coordinated by the UN Environment Programme Finance Initiative (UNEP FI) and the UN Global Compact.

Monique Barbut, Director of the UN Environment Programme explained: “The commitment embodied in the Principles and now supported by some of the world’s largest asset owners and asset managers is a clear signal to business and global capital markets. The USD 4 Trillions now backing the Principles confirm that the integration of environmental, social and corporate governance considerations is now an essential part of good business.”

“In fact, the Principles provide a blueprint for what is fast becoming the only way to do business in the globalizing markets of the 21st Century,” added Mme Barbut.

“The Principles for Responsible Investment forge a much-needed link between corporate responsibility and decision-making in the financial markets,” said Georg Kell, Executive Head of the Global Compact Office. “Through their focus on engagement, not divestment, the Principles represent a major milestone in our efforts to root global business in universal values to achieve a more sustainable global economy.”

In joining with institutional investors and investment managers to develop the Principles, the United Nations collaborated with some of the world’s most influential institutions – many of them public pension funds – involved in investment activities worldwide. It is estimated that pension funds alone – public and private – account for up to 35 percent of total global investment.

More than 20 pension funds, foundations and special government funds, backed by a group of 70 experts from around the world, held meetings in Paris, New York, Toronto, London, and Boston over an eight-month period to craft the Principles.

Francis Mayer, Chief Executive Officer of the Caisse des Dpts explained: “In light of our reputation as an experienced investor, as well as our long-term vision and focus on the public interest, I naturally wanted the Caisse des Dpts to play a role in drafting these benchmark principles set forth by the United Nations.”

Mr Mayer continued: “Our asset management policies and practice already focus particular attention on environmental, social and governance issues. We opted to take these factors into account across the board in our portfolio management, rather than limiting ourselves to a few funds invested in accordance with SRI principles.”

The six overarching Principles, which are voluntary, are underpinned by a set of 35 possible actions that institutional investors and asset managers can take to integrate environmental, social and corporate governance (ESG) considerations into their investment activities. These actions relate to a variety of issues, including investment decision-making, active ownership, transparency, collaboration and gaining wider support for these practices from the whole financial services industry.

The full text of the Principles for Responsible Investment, as well as an updated list of asset owner signatories, is available on the following website.

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