February 3, 2022
PRI’s Responsible Political Engagement Guidance
The Principles for Responsible Investment recently released its publication “The Investor Case for Responsible Political Engagement.” The PRI describes this publication as follows:
This paper sets out the PRI’s views on the investor case for responsible corporate political engagement. We explain why investors working towards sustainability objectives must ensure that their portfolio companies are conducting political engagement in a responsible manner. We include high-level principles on what this activity entails, based on existing views in academic and practitioner literature. We also discuss the key findings from the PRI-supported research, undertaken by the OECD, that maps out political engagement regulations across selected jurisdictions.
The PRI notes that corporate political engagement can be responsible when the company’s activities:
- Adhere to the letter and spirit of existing regulations and international best practice;
- Are conducted in line with business principles that ensure integrity and sustainability goals that have been set out in international agreements or national policy targets;
preserve the long-term interests of the company, including the broad interests of diversified shareholders and those of stakeholders; - Inspire trust and are grounded in robust governance and transparency; and
- Lead to well-informed, inclusive and effective public policy decisions that contribute to a stable economic system, minimise firm and system-level risks as well promote positive real-world sustainability outcomes.
The PRI expresses a concern that “unchecked political involvement can raise governance risks at a company level and increase risks of policy capture” and suggests key steps that investors can take to understand and address these risks.
– Dave Lynn
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