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pri engagement cuts corruption risk

The PRI Association analysed the impact of engagement by signatories representing some $1.7trn (€1.3trn) in assets under management, including Californian pension fund CalSTRS, F&C Asset Management, Henderson Global Investors and Hermes Equity Ownership Services.

Since March 2010, the group has targeted 21 companies with poor anti-corruption management transparency and relatively high levels of corruption risk, given the nature of their businesses.

The study found that by early 2013, 16 of the firms had improved the disclosure of their anti-corruption strategies, policies and systems, as measured by the Transparency in Reporting on Anti-Corruption indicators – a scoring methodology developed by Transparency International.

Of the 16 companies, ten had improved their performance against the indicators by four-fold, and the leading firm had registered a six-fold enhancement.

While the PRI Association declined to reveal details of steps taken by the companies, it said a key aim had been to encourage reporting in line with international frameworks such as the International Corporate Governance Network’s Statement and Guidance on Anti-Corruption Practices, and the UN Global Compact’s Reporting Guidance on the 10th Principle Against Corruption.

New engagement

A new engagement involving 12 PRI signatories and 50 firms across a wider range of sectors and countries is expected to be launched shortly. The project aims to better understand the ability of companies to both manage corruption-related risks and improve transparency.

The PRI initiative encourages investors to incorporate “sustainability” factors into their decision-making and ownership practices. Since the network was founded in 2006, it has grown from 100 signatories with $6trn in assets under management, to almost 1,200 signatories representing $34trn.

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