The University of California today (Sept. 22) announced that it has become a signatory of the United Nations-supported Principles for Responsible Investment, the first American public university to join the leading international network of institutional investors committed to including environmental, social and governance factors in their investment decision making.
By adding its name to the other 1,270 signatories who have agreed to put into practice six principles for responsible investing, UC has formally endorsed an investment framework that aligns with President Janet Napolitano’s systemwide sustainability initiative. The signatories of the PRI, as the network is known, collectively have some $45 trillion in assets under management.
“By publicly agreeing to adhere to the Principles for Responsible Investment, the University of California is demonstrating its commitment to invest in solutions to global challenges today, tomorrow, and years down the road,” Napolitano said. “This kind of collaboration among large investors will help support sustainability and environmental responsibility worldwide.”
The PRI was formed in 2005 when then-UN Secretary General Kofi Annan asked a group of the world’s largest institutional investors to help draft the Principles for Responsible Investment. The 20 people in the investor group — drawn from institutions in 12 countries — were supported by an additional 70 investment, governmental, social and environmental experts and the PRI was launched in April 2006 at the New York Stock Exchange.
“We are pleased to see the University of California join the Principles for Responsible Investment,” said Fiona Reynolds, the managing director of the network. “It takes a forward thinking organization to acknowledge the risks posed by the management of environmental, social and governance (ESG) issues, and I applaud the commitment of organizations that actively face these risks.”
The Principles for Responsible Investments, voluntary and aspirational, aim to further understanding of the implications of sustainable investing and support signatories to incorporate ESG issues into their decision making and ownership practices.
“Long-term investors face many systemic issues that are difficult to quantify let alone measure,” said Jagdeep Singh Bachher, UC’s chief investment officer. “To maximize the long-term return per unit of risk, we need to consider such systemic issues as climate change that will undeniably affect investment portfolios in the future. Adhering to the PRI is just one way that we are positioning our portfolios for the long-term.”
The six key principles are:
- We will incorporate ESG issues into investment analysis and decision-making processes.
- We will be active owners and incorporate ESG issues into our ownership policies and practices.
- We will seek appropriate disclosure on ESG issues by the entities in which we invest.
- We will promote acceptance and implementation of the principles within the investment industry.
- We will work together to enhance our effectiveness in implementing the principles.
- We will each report on our activities and progress towards implementing the principles.