Principles for Responsible Investment driving sustainable investment

Since their launch in 2006, Sustainable Investment Manager Françoise Martino of ABN AMRO Investment Solutions (ABN AMRO’s asset manager) has seen the PRI evolve from an idealistic initiative to a ‘licence to operate’. Françoise has first-hand experience of this development: together with dozens of other financial institutions, ABN AMRO was among the first signatories of the PRI.

“In the early days the PRI were a great way to see whether the bank’s sustainable investment principles aligned with international standards,” Françoise explains. “Quite honestly, though, that’s pretty much as far as it went at the time. There were also people who didn’t see any added value: signing the PRI means a lot of extra work.”

Flywheel

Since then, more than 2,300 investors around the world, representing a total of 85 trillion US dollars in invested assets, have committed to investing in accordance with the six sustainability principles defined in the PRI. This makes the PRI the leading sustainability initiative in the investment sector. Organisations that have signed the principles integrate ESG (environmental, social and governance) factors into their investment analyses, policies and decision-making processes and demand transparency about these factors from the companies in which they invest. They also work together toward effective implementation and report on their progress, and they encourage adoption of the Principles in the financial sector.

No greenwashing

One of the ways in which ABN AMRO gives concrete shape to the PRI is in assessing the managers of investment funds that the bank offers to its clients, Françoise continues. “Investment funds are subjected to an intensive analysis, consisting of two questionnaires of seventy questions. We also visit the fund managers’ offices to conduct a thorough due diligence. It is only at their offices that you can see what weight sustainability carries in the process of selecting the investments for their portfolios, and more importantly whether the investment manager’s people believe in it. This helps us to eliminate the possibility of greenwashing.”

Sharing knowledge

Supported by its members and the United Nations, the foundation has conducted extensive research into raising awareness of sustainability risks. Françoise explains, “The PRI is doing some incredible work. They’ve made remarkable progress in recent years, particularly in sharing knowledge and best practices, with ABN AMRO as an active contributor.” For example, ABN AMRO Investment Solutions hosted a session at the annual ‘PRI in Person’ conference, which this year was held in Paris.

The idea behind the event, entitled ‘Beyond Sustainability Labels’, stemmed from the numerous rating agencies that issue sustainability labels for investment funds. Each of those labels focuses on a different area or geographic region, and some are promoted by government institutions. The overall landscape is large and diverse, and can be confusing to investors who are thinking about making a sustainable investment. “That session was intended to help people understand that landscape, but also as an opportunity to discuss the future of sustainability labels,” explains Françoise.

Sustainable investment figures doubled

Vincent Triesschijn, Director Sustainable Investments at ABN AMRO, expects the PRI to continue to grow: “Sustainable investment is experiencing an upsurge, including at ABN AMRO, where sustainable investment is now the default for new investment clients.” Vincent also took the opportunity at the conference to announce that sustainable investments at the bank have doubled over the past two years, to 16 billion euros. This matches the target for 2020. “Our people have worked hard to achieve this. It’s important that our people possess an extensive understanding of sustainable investment. More than 1500 of them have completed the PRI Academy, and our investment advisers follow this with a course on sustainable investment from Oxford University. As you see, the partnership with the PRI is very important to us.”