by Martin Summers 20th February, 2019
2 min read

4 Ways to Make the Most of being a PRI Signatory

The Principles for Responsible Investment (PRI) now has over 2000 signatories, including many private equity firms. Signatories have to make their annual submission on how they approach and manage ESG (environmental, social and governance factors) by 1st April – typically resulting in a published Transparency Report.

This is an important – but often undeveloped – opportunity to submit content and create a powerful story about a firm’s commitment to ESG, including its approach to value creation.

The PRI provides excellent guidance on understanding their requirements, but how can signatories make the most of this opportunity?

1. Approach this as an opportunity to communicate rather than fulfil a compliance requirement.  Many transparency reports do not contain compelling content and read more like compliance exercises than valuable opportunities to communicate to investors and other audiences. Given the pressure on private equity to articulate fully on ESG issues to their investor base, this is surprising – especially as so many LPs are PRI members. It is important to remember that the potential audience is not just the PRI but its members and other stakeholders.

2. Map out the opportunities to communicate compelling messages. Many sections of the report require a tick box response, indicating whether certain policies, guidelines or processes exist or not. Other parts lend themselves more to a narrative approach, especially under Strategy and Governance, and in relation to the Pre-investment and Post-investment. It makes sense to identify these and work out where you can best communicate what your firm does and why.

3. Develop a narrative approach that ties together the sections with distinctive content and messaging. The structure of transparency reports and the reporting template means that the information presented is somewhat piecemeal. But this is all the more reason to ensure that consistent messages and themes should be used to link and reference disparate bits of content wherever possible. Focus on outcomes and the more people-oriented aspects of integrating ESG at firm and portfolio level.

4. Ensure consistency with your other communications. There is often a significant disconnect between PRI reports and other publicly available ESG communications. Many firms’ communications on ESG make little reference to the values, strategy and wider value creation approach of the firm. This risks ESG being siloed, rather than a fully integrated aspect of how a PE does business.

For more information on how GK can help with PRI submissions and the communication and integration of ESG, please take a look at our ESG services page, or get in touch with our head of ESG Martin at martin@gkstrategy.com.

See more articles by Martin Summers