universal spotlight: Mr. Neuneyer, in 2020, the number of German signatories of the Principles for Responsible Investment (PRI) rose by 51 to 162. Was there a specific reason for this increase?
Dustin Neuneyer: One key catalyst was the EU’s action plan on sustainable finance that was published in March 2018. Also, BaFin, the German supervisory authority, referred specifically to the PRI in a December 2019 announcement and encouraged investors to take advantage of our expertise.
PRI signatories were asked for the first time in the 2020 reporting questionnaire to consider some of the requirements outlined by the Task Force on Climate-Related Financial Disclosures (TCFD). What were the PRI’s findings?
As a result of this new PRI reporting requirement (which was not part of the mandatory disclosure), a total of 2,097 investors with 97 billion US dollars in assets reported in 2020 investors with 97 billion US dollars in assets reported in 2020 – a substantial increase on the 591 investors reporting the previous year. However, only 20 per cent of those investors chose to disclose any climate-related information and even fewer implemented the Task Force’s recommendations in full. New standards and the TCDF recommendations are starting to be implemented in the market, but it is still early stage. As a whole however, we are moving away from the stage where investors are only reporting on a voluntary basis and it is now conceivable that ESG metrics will become a standard feature of financial reporting.
How motivated are investors to implement ESG regulatory frameworks in Germany?
A lot of investors have not yet fully realised how long it will take to implement the regulatory requirements – nor that time is running out. Key decision-makers are no longer simply discussing the importance of ESG, they are working on the implementation of new laws and regulations. We have no time to lose, we need to join forces and push ahead with the implementation of these new measures and rulings.
(Published February 2021)
Author: Dustin Neuneyer, PRI
Date of issue: 6/29/2021
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