Oliver Hunt provides his thoughts on the PRI report
A new report “A Legal Framework for Impact” was issued on 21 July. PRI, the UN Environment Program and Generation Investment Management commissioned Freshfields Bruckhaus Deringer LLP to analyse the legal frameworks for pension funds, insurance companies and mutual funds to invest to address sustainability challenges (as well as produce a financial return). The analysis covers 11 jurisdictions, including the UK, and contains recommendations for policy makers wishing to facilitate greater impact consideration by this type of investor.
Bates Wells’ Senior Associate, Oliver Hunt, who was seconded to PRI to assist them with the project, comments:
“The report’s central conclusion is not unexpected: investors are required to consider sustainability factors where they pose material risks to financial performance, and to take appropriate action to mitigate those risks. However the report also investigates in what circumstances these investors might be able to pursue sustainability goals for their own sake in parallel with financial goals, and also provides substantial options for legal reform in each jurisdiction. Those interested in the UK legal framework for these types of investors should review the UK Annex to the report, which contains detailed analysis of the different circumstances in which sustainability issues will be relevant to investment decisions by different types of investor. The depth of the report’s analysis and thinking means that it should act as a significant building block for the urgent deliberations of governments and the investment industry regarding their approach to the climate and biodiversity crises.”