Last month, UNEP FI and the Principles for Responsible Investment (PRI) received the Investments and Pensions Europe 2017 gold award for Outstanding Industry Contribution in recognition of our work on Fiduciary Duty in the 21st Century. Long considered a barrier, the programme seeks to modernise conceptions of fiduciary duty to integrate environmental, social and governance (ESG) factors, and in doing so create the conditions for a more sustainable global economy.

This work is rooted in efforts that began in 2005 when UNEP FI and Freshfields Bruckhaus Deringer, a leading international law firm, published the ground-breaking Freshfields report, which concluded that ESG integration is clearly permissible and arguably required in all jurisdictions. Despite much progress in the following years, in 2014, PRI signatories identified “misperceptions of fiduciary duty” as the biggest barrier to responsible investment. To address this issue, UNEP FI along with the PRI, UNEP Inquiry and UN Global Compact published the Fiduciary Duty in the 21st Century report in 2015. The report concluded that “failing to consider all long-term investment value drivers, including ESG issues, is a failure of fiduciary duty”.

Building on this, the PRI, UNEP FI and The Generation Foundation launched a three-year project to end the debate surrounding fiduciary duty. The programme has produced eight country roadmaps to integrate ESG into investment processes, extended the work to six Asian markets, and is engaging with investors and policymakers to bring the recommendations to fruition.

The project is having an impact. Across the globe, there has been a noticeable shift recently in the fiduciary duty landscape. The Korean Stewardship Code was published in 2016, in 2017 the Brazilian regulator PREVIC approved revision of a resolution to clarify investors’ requirement to integrate ESG issues, and the EU recently launched a public consultation on investor duties and sustainability.