Viewpoint: Can We Rewrite the Rules of Green Finance Quickly Enough?
The use of ESG analysis in investment decision-making is still routinely conflated with the measurement of sustainable outcomes. We need a sharper lens.
“It’s not easy being green,” as Banco Santander’s head of wealth management quoted Kermit the Frog during the opening remarks of last week’s PRI in Person conference in Barcelona.
That may be. But before you shed a tear, this hasn’t meant that being, or at least presenting, green hasn’t brought in lots of green for asset managers since the now 4,902-strong Principles for Responsible Investment (PRI) signatory community with over $121 trillion in assets under management last convened in 2019.
The PRI is a United Nations-backed network of financial institutions collaborating to implement its six principles, which the PRI frames as “a menu of possible actions for incorporating ESG issues into investment practice.” To be a signatory investor means that, simply put, they commit to adopting and implementing the principles, whose primary purpose is better align investment activity with the broader interests of society.