UN Principles for Responsible Investment (PRI)

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Definition of 'UN Principles for Responsible Investment (PRI)'

The UN Principles for Responsible Investment (PRI) are a set of six principles that aim to encourage investors to incorporate environmental, social, and governance (ESG) factors into their investment decisions. The PRI was launched in 2006 by the United Nations Environment Programme Finance Initiative (UNEP FI) and the Principles for Responsible Investment Initiative (PRII).

The six principles of the PRI are:

1. **Integrate ESG factors into investment analysis and decision-making processes.** Investors should incorporate ESG factors into their investment analysis and decision-making processes, alongside financial factors, in order to identify and manage risks and opportunities.
2. **Adopt a long-term investment horizon.** Investors should adopt a long-term investment horizon, taking into account the long-term impact of their investments on ESG factors.
3. **Promote active ownership.** Investors should use their ownership rights to promote responsible corporate behavior.
4. **Seek to maximize the positive impact of investments.** Investors should seek to maximize the positive impact of their investments, while minimizing the negative impact.
5. **Advocate for sustainable investment.** Investors should advocate for sustainable investment, both within their own organizations and in the wider investment community.
6. **Work together to achieve impact.** Investors should work together to achieve impact, sharing knowledge and best practices, and collaborating with other stakeholders.

The PRI is a voluntary initiative, and there is no requirement for investors to sign up to the principles. However, over 3,000 investors with over $100 trillion in assets under management have signed up to the PRI, making it the largest global initiative of its kind.

The PRI has been praised for its role in raising awareness of ESG investing and encouraging investors to incorporate ESG factors into their investment decisions. However, it has also been criticized for being too voluntary and for not having a strong enforcement mechanism.

Despite these criticisms, the PRI remains a significant force in the global sustainable investment movement. It is helping to shape the way that investors think about ESG factors and is encouraging them to take a more active role in promoting sustainable development.

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