Six Danish investors, including large pension funds, have withdrawn from the UN-backed Principles of Responsible Investment (PRI) after criticizing its standards of governance.
ATP, Industriens Pension, PensionDanmark, PFA Pension, PKA and Sampension say they will continue to adhere to PRI’s stated principles but remain outside of the organization because it doesn’t measure up to the standards it demands of the companies it seeks to influence.
The investors say PRI has violated its own principles by operating with a lack of transparency and by not securing the support of its members while conducting internal changes. The investors have ‘over a sustained period of time, observed with concern that the governance of the PRI organization does not live up to the basic standards we as investors would expect of the companies in which we invest,’ they say in a joint statement. ‘Therefore, we have chosen to leave the PRI organization until [it] re-establishes the fundamental principles of governance.’
The investors, which include some of Europe’s largest sustainability-focused funds, say they will stop reporting to PRI on their sustainability initiatives and the core principles that make up PRI’s central mission but they may join again later if PRI overhauls its own governance structure.
PRI responded to the decision by saying it agreed at an October meeting to review its own governance and that its governance committee has already started to define the terms of the review, which will be led by a new council chairman who is to be appointed in 2014.
‘The PRI is deeply disappointed this has occurred,’ says Fiona Reynolds, managing director of PRI, in response to the investors’ letter. ‘We had previously arranged to meet with our Danish signatories in Copenhagen on January 13 and we plan to continue with this meeting and hope all of the funds concerned attend.’
