Six Danish pension funds have decided to leave the United Nations-supported Principles for Responsible Investment (PRI) initiative because of concerns over the governance of the organisation.
ATP, Industriens Pension, PensionDanmark, PFA Pension, PKA and Sampension said they would stick to the values upon which the initiative was founded, but would do so outside of the organisation.
The six funds complained of a lack of transparency and membership democracy within the initiative, saying, “the governance of the PRI organisation does not live up to the basic standards we as investors would expect of the companies in which we invest.”
“Despite numerous attempts to improve the conditions within PRI, we must, unfortunately, acknowledge that these attempts have not been successful.”
PRI managing director Fiona Reynolds said the organisation was “deeply disappointed” by the decision.
“The PRI Advisory Council is democratically elected by signatories and is globally diverse, made up of representatives from all three categories of signatory and regions of the world,” Reynolds said.
“Given the important work of the Danish pension funds in responsible investment, we hope that the funds concerned will reconsider their decision at some point in the near future.”
She added that PRI is currently considering a review of its governance structure.
The UN-backed initiative currently has 1,230 signatories, managing assets of around $35 trillion (£21.4 trillion) – though the six Danish pension funds are still included in these calculations.
It was founded in 2006 to promote six aspirational investment principles covering a range of environmental, social and governance (ESG) topics such as transparency, decision-making and active ownership.
Speaking to Blue & Green Tomorrow in November, the outgoing executive director of PRI James Gifford said, “The PRI has been successful within the institutional investment world, in demonstrating that integrating ESG factors into investment processes and ownership activities is core, mainstream activity, and it’s quite different from the traditional ethical investment movement.
“I think we’ve been successful in that.”