Key Takeaways from PRI in Person 2024

This year’s PRI in Person event in Toronto was packed with a wealth of thought-provoking content that almost stretched into a full week of activities. With a focus on responsible investment, there were many great conversations with action-oriented content that could benefit investors and firms around the world. Here are some of the main takeaways.

Climate change

Climate related considerations are not just environmental issues, they create material financial risks that impact every asset class. Conversations during the event emphasized three key macroeconomic trends that investors should keep in mind as the industry continues to evolve:

• Engagement with policy makers and investees is an important tool to standardize the industry and mitigate risks.
• Carbon pricing should be incorporated in financial risk analysis.
• Scope 3 emissions are increasing in materiality due to disclosure regulations. Investors and investees alike should seek to better understand their value chain.

Global reporting landscape

Despite headwinds to environmental, social, and governance (ESG)-related efforts in the U.S., global markets continue to progress with increased reporting requirements, new voluntary frameworks/entities, and increasing maturity of ESG integration. While each of these new developments differ, the International Organization of Securities Commissions (IOSCO) estimates 130,000 companies worldwide will eventually apply the International Sustainability Standards Board (ISSB) Standards, indicating the industry is seeking to move towards standardization of disclosures to reduce the reporting burden and improve transparency.

Human rights

As one of the PRI’s priority ESG issues, human rights featured prominently on this year’s agenda. Many initiatives are currently trying to tackle this issue, including the Advance initiative, the recently adopted Corporate Sustainability Due Diligence Directive (CSDDD), and the launch of the Task Force on Inequality and Social-Related Financial Disclosures (TISFD).

The conference emphasized the tension between maintaining minimum social protections while striving to remain within planetary boundaries, ensuring meaningful engagement and collaboration with rightsholders in critical minerals development, and the need for a human lens in the development of transition plans to promote a just transition.

Balance of power and ESG-related issues

One of the main messages that came through the was recognition of the need to understand linkages and knock-on effects among ecological, social, and financial systems, based on ongoing lessons learned. The race to power the energy transition with critical minerals must be tempered with forethought and meaningful engagement to avoid adverse impacts to nature and respect the rights of indigenous peoples. The urgency to phase out fossil fuels must be balanced with careful planning to prevent socioeconomic collapse for entire communities, and accordingly, development of regional or global frameworks to incentivize better ESG performance must be thoughtfully designed for relevance and responsiveness to local contexts.

This theme of stepping back to fully appreciate and address complexity poses an interesting tension with discussions on technological solutions such as AI. At least at this point in time, certain processes (such as meaningful stakeholder engagement, or understanding of local cultural context) cannot adequately be substituted with technological advancements and demonstrate the continued place for a human element in ESG analysis and implementation.

PRI: looking ahead

With specific details expected to be released in 2025, our team heard from PRI representatives on some of the key features they are considering for the future state of PRI reporting:

• By defining specific pathways, benchmarking results will improve in relevancy.
• Each pathway will include “pillars of practice” that will go beyond the 6 Principles to help guide signatories on their ESG journeys, though PRI emphasized disclosures not being a labeling regime nor being solely responsible for all program development efforts.
• The reporting structure will change to include Foundation reporting and Progression reporting, with continued emphasis on minimum requirements and the 6 Principles. Efforts will be made to reduce duplicative reporting across frameworks.

The UN’s PRI in Person event in Toronto highlighted critical trends, challenges, and forward-thinking solutions across the landscape of responsible investment. Through thought-provoking sessions on climate change, the evolving global reporting landscape, human rights, and the power dynamics within ESG-related issues, attendees gained actionable insights to navigate this rapidly evolving space. The emphasis on integrating ESG principles across policy, risk analysis, and reporting underscores a growing commitment to sustainability and social responsibility. As PRI looks ahead, the future of responsible investment will be marked by a push toward standardization, transparency, and meaningful engagement with all stakeholders.

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