Research Grant Contest Announced for Studying ESG Investing

A consortium of institutional investors has announced a competition for a grant to launch a research project that will analyze how ESG-oriented investing does or does not further goals of fostering a more sustainable and equitable global financial system, especially in the developing world.

The United Nations-sponsored group, the Principles for Responsible Investment, announced the call for research plans, to be funded over five years with a grant of 300,000 pounds ($371,000). Proposals are due June 28, and the research would start this year. PRI was formed in 2005, drawing from institutions in 12 nations and dedicated to incorporating environmental, social and corporate governance principles into investment analysis and decisionmaking.

A critical item expected to be examined by this inquiry is how large investors can better understand the needs of the Global South—countries that have not yet achieved “developed” status—which sometimes differ from those of developed countries, such as poorer nations’ greater reliance on carbon-based fuels.

As the announcement put it, “What roles can responsible investment play in addressing systemic challenges including inequality, entrenched poverty, and a just transition to a low-carbon economy?”

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Two of the top PRI officials, after whom the Reynolds & Gifford PRI Grant is named, addressed a meeting announcing the contest with the message that the organization had accomplished much, but still has a long way to go.

James Gifford, the group’s founding executive director and also the head of sustainability and impact advisory at UBS Global Wealth Management, noted the role of pension funds and other allocators in boosting ESG through private investing. “Ownership is important,” he said, meaning the impact of well-funded institutions pushing for change.

Fiona Reynolds, a former PRI executive director and the chair of the UN Global Compact (Australia) and Finance for Peace, added that it also is “unrealistic for the private sector to solve all the world’s problems.”

Despite gains in enlisting institutions and widespread adoption of “responsible investing” precepts, the PRI pointed out in the document outlining the contest that global temperatures are still rising. It asked, “Can RI be a path to a better financial system that positively influences the broader systems around it?”