Inspiration from integrated corporate reporting
The United Nations Principles for Responsible Investment, the international investor network, is looking to use the momentum created by the move towards integrated corporate reporting to create something similar for institutional investors.
The 835-member PRI is looking at enhancing its transparency requirements in 2012, with the development taking place next year.
“There needs to be commonality in how we report engagement,” said PRI Executive Director James Gifford. There was an opportunity to develop “standardised and integrated reporting” from an investor standpoint.
The move comes as the PRI plans to introduce an annual subscription fee for all signatories.
Gifford, speaking at an event organised by research firmEIRIS in London, noted that ESG reporting by investors is 10-15 years behind corporate social reporting (CSR) – but said “I feel we can fast-track that”. There were best practices emerging, for example on voting.
The UN PRI’s partner the UN Global Compact already collaborates with the Global Reporting Initiative on aligning their work on corporate responsibility and
transparency. The integrated reporting movement seeks to combine corporate financial reporting and corporate sustainability reporting into a single, usable report for investors and other stakeholders.
The GRI launched the high level International Integrated Reporting Committee with Prince Charles’ Accounting for Sustainability Project earlier this year. And there are various other projects in the area, such as the Asset Owner Disclosure Project.
Carl Rosen, Executive Director of the International Corporate Governance Network, told the meeting that there were probably not more than 10 examples of good investor ESG reporting in the world. “We are a bunch of nerds but we are not communicating to the outside world,” he said.
Meanwhile, the PRI is launching annual sliding-scale subscription fees from April 2011. The fees will not go beyond the previous voluntary maximum of $10,000 (£6,600). The plan could provide the PRI with revenues in the six-figure zone.
There are fee bands for investors according to the size of assets under management while other signatories will face fees according to the size of their staff.