The Principles for Investors in Inclusive Finance (PIIF) initiative has been created as a separate work stream housed within the United Nations’ (UN) Principles for Responsible Investment (PRI), a set of principles devised in 2005 by 20 institutional investors to encourage investors to incorporate environmental, social and corporate governance (ESG) issues into their internal policies and investment strategies. (As of February 2011, UNPRI has 876 signatory investors). PIIF provides a framework for responsible investment focusing on providing access to finance to poor and vulnerable populations. The seven principles of PIIF and its charter signatories are listed in the February 2011 MicroCapital.org story announcing the launch of the initiative: https://www.microcapital.org/microcapital-special-report-%E2%80%9Cprinciples-for-investors-in-inclusive-finance%E2%80%9D-launched-at-responsible-finance-forum-in-the-hague-netherlands/ [2].
PIIF is currently led by an interim steering committee, which is headed by Marilou van Golstein Brouwers of Triodos Investment Management BV, which is based in the Netherlands. According to Ms van Golstein Brouwers, PRI is looking to create a permanent steering committee for PIIF by July 2011 to oversee the governance and monitoring of the initiative. This group would consist of representatives of signatories of the principles and be headed by a full-time manager [1].
The initiative endeavors to achieve compliance with industry standards such as CGAP’s (Consultative Group to Assist the Poor’s) microfinance investment vehicle (MIV) disclosure guidelines [3] and the Global Impact Investing Network’s (GIIN’s) Impact Reporting and Investment Standards (IRIS) [4]. Ms van Golstein Brouwers recently told MicroCapital that, “the idea is not to reinvent the wheel, but to build on what is already happening and to bring that into PIIF” [1]. Webinars and case studies published on the PRI website are expected to serve as a medium for exchanging ideas and best practices among investors.
As per Ms van Golstein Brouwers, signatories of PIIF will be expected to report on each element of PIIF on an annual basis, once these elements are finalized by the steering committee [1]. On the reporting aspect, Ms van Golstein Brouwers said, “We don’t see this as hard ticking boxes across the seven principles of PIIF, we see this as a living document and work stream, where we will work with the investors and share with other investors on how we are working with these principles” [1].
Ms van Golstein Brouwers stated that the steering committee and Her Royal Highness Princess Máxima, the United Nations Secretary General’s Special Advocate for Inclusive Finance for Development, are using various forums to involve more investors with this initiative, with a focus on increasing the representation of pension funds within PIIF [1]. As per Ms van Golstein Brouwers, “What we hear from pension funds is that…they are worried about increasing reputational risk. These principles provide a framework to help them in their discussions with fund managers to address this risk” [1].
By Medha Ravi, Research Associate
About United Nations Principles for Responsible Investment (UNPRI):
The United Nations Principles for Responsible Investment (UNPRI) initiative is a network of international investors created under the auspices of the United Nations (UN) in 2005 to promote the practice of responsible investing. Based in the United Kingdom, UNPRI has put together six principles for responsible investment which focus on environment, social, and governance (ESG) principles; collaboration; and transparency. Its signatories are its members, including asset owners, investment managers and professional service partners who work in concert to promote UNPRI principles in practice. As of February 2011, UNPRI has 876 signatory investors. The Principles for Investors in Inclusive Finance (PIIF) initiative was created in 2011 as a separate work stream housed within UNPRI to serve as a framework for responsible investment focusing on providing access to finance to poor and vulnerable populations.
About CGAP (Consultative Group to Assist the Poor):
Housed at the World Bank Group, CGAP (Consultative Group to Assist the Poor) is an independent policy and research center established in 1995 dedicated to facilitating the provision of financial access to poor people worldwide. CGAP is supported by approximately thirty development agencies and private foundations. Its mission is to provide market intelligence, to promote standards and to offer advisory services to governments, microfinance providers, donors and investors.
About Global Impact Investing Network (GIIN):
The Global Impact Investing Network (GIIN) is a nonprofit organization based in New York City that is dedicated to increasing the effectiveness of impact investing, which it defines as for-profit investment intended to solve social and environmental problems. GIIN works to increase “the level and effectiveness of capital that is supporting market-based solutions to social and environmental problems.” As of 2011, GIIN has 37 members.
About Triodos Investment Management:
Triodos Investment Management manages several funds that provide risk capital. The firm invests in the development of financial sectors in developing countries, renewable energy finance and venture capital. In addition to the Triodos Venture Capital Fund BV and Triodos Ventures BV, Triodos also manages four microfinance investment funds. These funds are the Hivos-Triodos Fund, the Triodos-Doen Foundation, the Triodos Fair Share Fund and Triodos Microfinance Fund. As of 2010, Triodos had assets under management of EUR 5.6 billion (USD 8.1 billion) and a net profit of EUR 11.5 million (USD 16.6 million).
Source and Resources:
[1] MicroCapital interview with Marilou van Golstein Brouwers of Triodos Investment Management, March 2011
[2] MicroCapital.org story, February 4, 2011, “MICROCAPITAL SPECIAL REPORT: “Principles for Investors in Inclusive Finance” Launched at Responsible Finance Forum in The Hague, Netherlands”, https://www.microcapital.org/microcapital-special-report-%E2%80%9Cprinciples-for-investors-in-inclusive-finance%E2%80%9D-launched-at-responsible-finance-forum-in-the-hague-netherlands/
[3] CGAP (Consultative Group to Assist the Poor) Microfinance Investment Vehicles (MIV) Disclosure Guidelines, http://www.cgap.org/p/site/c/template.rc/1.11.126928/1.9.47636/
[4] Impact Reporting and Investment Standards (IRIS), http://www.thegiin.org/cgi-bin/iowa/reporting/index.html
MicroCapital.org story, November 2, 2010, “MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor), United Nations Principles for Responsible Investment Initiative Set Standards for Microfinance Investment Vehicle Environmental, Social and Governance (ESG) Performance”, https://www.microcapital.org/microcapital-brief-cgap-consultative-group-to-assist-the-poor-united-nations-principles-for-responsible-investment-initiative-set-standards-for-microfinance-investment-vehicle-environmental-socia/
MicroCapital.org story, March 28, 2011, “MICROCAPITAL BRIEF: International Finance Corporation (IFC) Signs United Nations-backed Principles for Responsible Development (PRI), Will Promote PRI Through Events in Emerging Markets”, https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-signs-united-nations-backed-principles-for-responsible-development-pri-will-promote-pri-through-events-in-emerging-markets/
MicroCapital’s Microfinance Universe profile: United Nations Principles for Responsible Investment (UNPRI), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=United+Nations+Principles+for+Responsible+Investment
MicroCapital’s Microfinance Universe profile: CGAP (Consultative Group to Assist the Poor), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=CGAP+(Consultative+Group+to+Assist+the+Poor)
MicroCapital’s Microfinance Universe profile: Global Impact Investing Network (GIIN), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Global+Impact+Investing+Network+%28GIIN%29
MicroCapital’s Microfinance Universe profile: Triodos Investment Management, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Triodos+Investment+Management
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
Similar Posts:
- MICROCAPITAL BRIEF: UNI2 Microcrédito of Colombia Raises $3m in Debt from Triodos Microfinance Fund, Triodos Fair Share Fund
- MICROFINANCE EVENT: GSG Global Impact Summit 2023; October 2-3; Malaga, Spain
- MICROCAPITAL BRIEF: Energy Entrepreneurs Growth Fund (EEGF) Raises $125m to Increase Access to Energy in Sub-Saharan Africa
- MICROFINANCE PAPER WRAP-UP: “Climate Risk and Financial Inclusion: A Regulatory Perspective on Risks and Opportunities;” by Peter Knaack, Peter Zetterli
- MICROFINANCE EVENT: 5th Annual CLIIQ Nexus Latam; September 26-28, 2023; Cuenca, Ecuador
