Principles for Responsible Investment (PRI)

Launched in 2006, the framework is run by an independent network of signatories that includes asset owners, investment managers and service providers. Four of the six commitments concern the investor's own conduct: weighing ESG factors in analysis, acting as an engaged owner, asking investee companies for disclosure, and reporting on what was done. The other two look outward, to promoting the principles across the industry and working with other signatories. Signatories complete an annual report on how they apply them, and those who repeatedly fall short can be removed. It is a commitment to a process and does not tell investors what to buy or avoid. Investors cite it in policies and tenders, and clients ask about it. Since it has no legal force, its weight comes from how many large investors sign and how openly they report.

A university endowment invites tenders from fund managers and asks each whether it is a signatory and what its latest annual report showed. One manager is a signatory, has a named person responsible for ESG analysis and can show examples of engagement with companies. Another is not a signatory and offers only a policy statement, so it scores lower.