18 February 2016: The UN Environment Programme (UNEP) and partners announced a three-year programme to encourage investors and policy makers to integrate sustainability concerns in decision making around investment practices.

UNEP is undertaking the programme in partnership with Principles for Responsible Investment (PRI) and The Generation Foundation. The project builds on a 2015 report by UNEP, PRI and the UN Global Compact, titled ‘Fiduciary Duty in the 21st Century,’ which analyzed investment practice and fiduciary duty in eight countries: Australia, Brazil, Canada, Germany, Japan, South Africa, UK and US. The three-year project now seeks to encourage these governments to clarify the scope of fiduciary duty with regard to environmental, social and governance (ESG) issues in investments. The project also will further analyze markets in China (including Hongkong), India, Malaysia, Singapore, and South Korea, and provide country-specific recommendations.

Fiona Reynolds, managing director of Principles for Responsible Investment (PRI), noted that the 2015 report found that failing to consider long-term investment value drivers, such as ESG issues, is a failure of fiduciary duty. Nevertheless, she said, “outdated perceptions” about fiduciary duty persist, and many investors do not integrate the issues into their decision-making processes.

The three-year programme seeks to clarify a common understanding of fiduciary duty with regard to sustainability, and to develop an international statement on fiduciary duty and sustainable development, with signatories who will promote responsible investment through their commitment to integrating sustainability into their fiduciary duties. The project is undertaken under the UNEP Finance Initiative (FI), which aims to bring about systemic change in finance, focusing especially on the banking, finance and insurance sectors. [Joint Press Release] [Fiduciary Duty in the 21st Century] [UNEP FI Website]