The UN Principles of Responsible Investment: Enviromental Investment or Greenwashing?

We are pleased that the University of Edinburgh has signed up to the UN Principles of Responsible Investment (UNPRI). As one of the first universities in Europe to do so, this gives it the opportunity to lead the way in embedding its public responsibilities in its investment processes.

However, we are concerned that signing the UNPRI is not enough on its own, and if this pledge is not backed up with committed action, the UNPRI may serve as a form of greenwashing. A review by Taylor R. Gray, of the University of Oxford, concludes that although the UNPRI has been successful in legitimising the ideology of responsible investment, the scheme lacks transparency and signatories may ‘freeload’ on the actions of other members of the scheme and on the perceived morality of the UNPIRI – without taking any action themselves.

The UNPRI embeds ‘Environmental, Social and Governance’ (ESG) criteria – which have been proven to correlate with long term financial return (see page 5 of the review)  – into decision-making, and with signatories already representing $15 trillion of investments, it has considerable potential for concerted action by signatories to improve the global environmental and social behaviour of corporations across the world. However, it has no enforcement mechanisms, or democratic oversight, and a significant number of signatories have not reported taking any action after joining the scheme.

We hope that the University of Edinburgh will continue its leadership in the field of responsible investment, and call on it to make its commitment to the UN Principles of Responsible Investment a reality by divesting from arms and fossil fuels, making the investment committee more accountable, and investing positively in improving the environmental efficiency of its own estate.

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