Principles for Responsible Investment

On 28 November 2013 the German PRI network have met at the headquarters of KfW In Frankfurt. The Principles were developed by the UNEP Finance Initiative and the UN Global Compact together with an international group of institutional investors. They reflect the view that environmental, social and governance (ESG) issues can affect the performance of investment portfolios.

KfW joined the PRI Initiative in 2006 and has managed its liquidity portfolio since 2008 sustainably. It is one of the largest non-government bond issuers in the world and is also a pure bond investor.

The network of German PRI signatories was initiated by KfW in 2011, then comprising 12 members, whose number has since risen to 46. The purpose of the 2013 network meeting is for participants to gain in-formation on the current focal points of PRI activities – an investor initiative in collaboration with the United Nations that develops principles for responsible securities management. Managing director Fiona Reynolds, together with colleagues from London, will be reporting on the international developments of the PRI Initiative and expanding on the require-ments that PRI signatories have to fulfil when reporting on their progress in implementing the individual principles.

The event was also useful for fostering contacts within the German net-work: For investors who wish to give their business a sustainable focus, the PRI network offered a valuable platform for the exchange of relevant experience, knowledge and methods. This cooperation between various asset managers, asset owners and service providers strengthens the initiative and increasingly raises awareness.

To support signatories in implementing the individual PRI, they formed international working groups together on selected topics. Collective know-how is thus elaborated and shared. The PRI "Fixed Income" working group (bond market), whose results were presented, was tasked with examining whether conventional credit analyses of government and corporate bonds adequately capture their risk factors, or whether they should be extended with longer-term factors (ESG criteria). The analysis of the government bond sector was led by Florian Sommer, Union Investment, while that of the corporate sector was headed by Dr Solveig Pape-Hamich, KfW.

Results of the PRI working group "Sovereign Bonds"

Sovereign Bonds: Spotlight on ESG Risks 2013(PDF, 3 MB, non-accessible)

(Florian Sommer, Sustainability Senior Strategist, Union Investment)

Results of the PRI working group "Corporate Bonds"

Corporate Bonds: Spotlight on ESG Risks 2013(PDF, 648 KB, non-accessible)

ESG as a Risk Indicator for Bond Investors(PDF, 906 KB, non-accessible)

(Dr Solveig Pape-Hamich, Head of Investment Strategies, Sustainability, KfW)

As of July 2015