1. PRI – Service Provider Reporting
2018 reporting cycle
November 2017

2. Today’s agenda Drivers for service provider reporting
Benefits of reporting
The 2017 pilot reporting year and changes for 2018
What to report in 2018
The framework logic
The reporting cycle
Reporting outputs
Future developments

3. Drivers for Service Provider Reporting

4. Demonstrating accountability
PRI’s strategy commits to transparency and accountability for all signatories. There are several drivers for Service Provider Reporting:
Allows service providers to demonstrate commitment to the Principles
Responds to service providers’ desire to communicate their RI/ESG activities
Accountability
Gives asset owners and investment managers more visibility on service provider activities
Enables understanding of what service level they can/should expect
Provides a high-level comparison
Transparency
--In its Strategy, the PRI committed to Transparency and Accountability for all signatories. In relation to this, the Strategy also committed to introducing service provider (SP) reporting. 
Like with investor signatories, this means that service providers will be reporting on a mandatory basis and need to submit their report by 3rd of April If you do not submit on time, you risk being entered into a delisting process. You will have received an on the 5th of January letting you know whether your particular organisation is reporting on a mandatory or voluntary basis this year.
There were several drivers for introducing SP reporting: 
It will firstly allow SPs to demonstrate commitment to the Principles in a transparent and consistent way. This also enhances PRI’s ability to hold them accountable to the Principles. 
It also responds to Service Providers desire to communicate and demonstrate their RI activities and how they support the PRI cause. 
Reporting also gives investors improved access to SP information and more visibility of that particular market.
This will also help investors understand what service level they can and should expect from SPs and could also help investors to do a high level comparison of the level of ESG services that various providers are offering.

5. Benefits of reporting

6. Benefits of reporting I
Reach stakeholders and potential clients on a new platform
Showcasing your services:
Displaying your RI/ESG edge
Improved visibility to asset owners and investment managers may provide additional value for service provider signatories
Contributing to:
Standardising the reporting of service provider activities
Knowledge-sharing among signatories
Enhancing best practice in the industry
We have identified several benefits of reporting for service providers.
Essentially, the PRI reporting framework gives you a great platform to display your ESG/RI competencies and services. With 1900 PRI signatories, and various ways of sharing your individual PRI report, the improved visibility can open up new dialogue with existing or new clients, and provide opportunities for interesting collaborations among peers.
You would also be contributing to:
Standardizing the reporting of service provider activities
Knowledge sharing among signatories through public reports and other PRI platforms.
The improved visibility of SPs’ ESG activities can also enhance best practice in the industry, by creating some healthy peer competition and raising the bar on the level of ESG services that investors can expect

7. Benefits of reporting II
Identify internal opportunities for change and improvement
Utilise the information generated from your PRI reports:
Summarising your RI/ESG activities
Use for engagement with internal staff, clients, shareholders and regulators
Gives a good overview of your organisation’s RI/ESG practices and capacity
Identify risks and areas for improvement
Strengthen internal procedures and build RI/ESG capacity
Learn more about other service providers’ business activities:
View and use data for analysis, compare and share with others.
Continuing on the benefits of reporting, it also allows you to use the reported information internally to identify opportunities for change and risks within your organisation. In that way, reporting gives you a good overview of your organisation’s RI/ESG practices and capacity. You can then use this to pin-point and strengthen internal procedures, and build your organisation’s ESG services.
Reporting also allows you to learn more about what other SPs are doing in the industry. You can easily view and use reported data, compare with others and share externally.

8. The 2017 Pilot Reporting Year
Feedback and changes
Before we move on to talk about the main features of the 2018 SP reporting framework, I’d like to thank everyone that participated in the pilot reporting cycle last year. We received some great feedback which allowed us to make significant improvements to the framework.

9. Feedback received
Signatories participated in a voluntary SP pilot reporting cycle in 2017
Showed signatory support for the overall framework approach
180 pieces of unique feedback received
Key themes:
Wording and terminology
User feedback on the Online Reporting Tool
Clarity of guidance on how to report
Identification of data which sometimes had not been tracked before
The 2017 cycle was voluntary, and 64 signatories submitted their reports. This represented 29% of our total SP signatory base at the time.
Signatories were able to give feedback on individual indicators as they were reporting and the feedback showed support for the overall approach of the framework.
Some of the key themes that were addressed in the feedback related to wording and terminology of indicators, user feedback on the Online Reporting Tool and more guidance on how to report. The PRI also found some areas that signatories had not been tracking before that we find could be useful to track for their internal operations and accuracy of ESG data.

10. Pilot Service Provider Reporting Framework approach to be maintained
2018 Implementation
Pilot Service Provider Reporting Framework approach to be maintained
Feedback the basis for main changes aimed to:
More accurately and efficiently capture information on ESG/RI implementation
Enable more data analysis by switching from narrative to multi-selection indicators
Provide more context and nuance through additional information boxes
Reduce the amount of indicators
For the 2018 reporting cycle, the general message was to keep the overall approach of the SP framework, but to make some improvements regarding:
More accurately and efficiently capturing information on ESG/RI implementation, e.g. by improving the clarity of indicators and the guidance or explanatory notes
We also switched quite a few indicators from narrative to multi-selection responses. This was done through analysis to find common themes in signatories’ narrative responses and creating check-box options instead. Not only will this make the reporting process faster for signatories, but it will also allow more data analysis by the PRI data team.
We did also add more ‘additional information’ boxes, i.e. space where you can provide a narrative response if you wish to give more context to a particular indicator.
Most importantly in many regards, we significantly reduced the number of indicators throughout the framework

11. 2018 mandatory service provider reporting – an industry first
Successful consultation and supportive feedback process led to:
Reduced reporting workload - 12% fewer indicators in 2018
Fewer overlaps, better structuring, relevancy of indicators enhanced, and better guidance.
Out of 60 signatories, 86% thought the framework captured their organisation’s implementation of the Principles
Thanks to the feedback we received in the 2017 pilot year, we were able to reduce the total amount of indicators in the framework by 12%. In the graph to your left you will see that we now have a total of 74 indicators in the framework. Important to note here is that most signatories will only see a fraction of these indicators. It’s quite rare that someone reports on every single indicator in the framework.
This resulted in fewer overlaps, better structuring of the modules, keeping only the most relevant indicators and improving the reporting guidance. Again, this will ultimately lead to a faster reporting process.
In the 2017 reporting cycle, we also asked signatories how well they thought that the reporting framework captured their organisation’s implementation of the Principles. In the pie-chart to your right, you will see that out of the 60 that replied to this indicator, 40% said to a large extent, and 46% to a moderate extent. With the updates being made to the framework, we aim to boost satisfactory levels in 2018.

12. What to report in 2018
Mandatory from 2018

13. Three modules reported by all SP signatories
Seven modules in total
Three modules reported by all SP signatories
The reporting framework is made up of 7 modules in total. Three of these modules are mandatory to complete for all SP signatories, regardless of the type of services you offer. You can see that these modules are marked in dark blue.
The first one is Organisational Overview (OO) – This module covers basic organisational information like number of staff, location of HQs and what types of services your organisation offers.
The second one is Strategy & Governance – This module asks for your overall approach to ESG or RI. For instance, you can report on whether you have an RI policy, what the ESG beliefs or philosophy are of the organisation and what the staff capacity looks like in terms of responsibilities and implementation of ESG.
The last of these mandatory modules is Closing Module (CM) – This is where you confirm you responses to the framework, give feedback and indicate whether you have had some or all of your report assured or verified.
Then there are 4 modules that are specific to certain business areas. I will go through these in the next slide.

14. Four specialised modules
To cover our largest SP signatory categories
Relevant modules only:
Advisory & Consultancy (AC)
Active Ownership services (AOS)
Investment consultants, execution and advisory. Activities may include, strategic asset allocation, investment policy development, investment research, manager selection and monitoring.
Engagement and/or voting. Activities can be individual or collaborative.
PRI has around 15-sub categories for our 240 service provider signatories. For example, a sub-category is ‘data provider’, ‘investment consultant’, ‘engagement’, ‘media’ or ‘research’.
Out of these 15 categories, we have developed specific modules for four broad categories. These are the modules that you see on the screen and are called:
Advisory & Consultancy – covering those that provide services such as investment consulting. Activities may include strategic asset allocation, investment policy development, investment research, manager selection and monitoring.
Active Ownership services – covering engagement and/or voting.
Reporting and Assurance – covering different types of reporting services such as financial and integrated, as well as assurance and certification services
Research and Data Provision – covering areas such as ratings, indices, research, assessment and brokerage
In the RF you will find more specific definitions for each of these groups if you are unsure what your organisation should identify as.
A major reason for creating specific modules for these four broad categories is that they represent the largest portion of our SP signatory base
Another thing to note is that these modules are only mandatory to report on if the services that you provide, that correspond to these modules, form part of your core services. I.e. services that are the main source of revenue or profit in the organisation, or what the organisation was originally set up to do.
If, however, you report that you e.g. active ownership services but that this is a non-core business offering, you may select whether to report on the ‘Active Ownership Services’ module.
Reporting and Assurance (REP)
Research and Data Provision (RDP)
Reporting (RI, ESG, sustainability, financial, integrated), assurance, certification
Research, assessment, ratings, indices, brokerage

15. Other service provisions
You can still report if you do not identify with the four specialised modules
Organisational Overview (OO)
Strategy & Governance (SG)
Closing Module (CM)
Service providers that do not identify with the four specialised modules will still be able to complete OO, SG and CM
You can specify your particular business offer(s) by selecting ‘Other’ and providing further details on how you implement ESG/RI
Media/ IR communications / marketing, data management system providers, training/education, non-profit, industry association, or similar
If you do not identify with any of the 4 specialised modules, you can still report on your services in the framework. There is space to do so in the three mandatory modules that I mentioned before, i.e. OO, SG and CM. Some of the organisations that might qualify as ‘Other’ are those that provide media and RI communications services, or e.g. industry associations. We will analyse the need to introduce additional modules to cover some of these services each year.

16. The Framework Logic Key functions
The framework has a built-in logic system, which allows for an efficient reporting process where only the relevant indicators are unlocked for your organisation. This way, you don’t have to filter through the various indicators and modules in the framework to decide what is important to report on. Instead, the framework logic pre-selects indicators and modules based on a few selections that you make in the beginning.

17. Organisational Overview Module
OO drives the rest of the Reporting Framework
Organisational Overview (OO)
OO 03
Specify your service offering(s). Select from the four main categories (AC, AOS, RDP, REP), and/or choose ‘Other’
OO 05
Specify whether you derive any ESG revenue from the service offering(s) reported in OO 03
If yes, the corresponding modules for those service offering(s) will unlock:
If none of your revenue is derived from ESG activities for the services reported in OO 03, you will only be required to complete SG and CM:
The most important logic function occurs in the Organisational Overview module – this is where the framework decides which other modules apart from SG and CM that it should unlock for you. The most important indicators for you to know about in this regard are OO 3 and OO 5 in the OO module.
In O3, we ask you to report what you do, i.e. the services you offer. As mentioned, you select from the four broad categories (AC, RDP, REP and AOS) or select ‘Other’ if you don’t identify with these four, and then you also break down your services in core and non-core types.
In 05, we ask you how much of these services are covered by ESG, i.e. whether you derive any revenue from ESG services in these business offerings.
If you do, those services where you do derive revenue from ESG will unlock as modules (AC, RDP, REP and AOS)
If you do not, or if you selected ‘Other’ in 03, the only modules that will unlock for you are SG and CM.
This is the key logic of the framework which determines most of what you need to report on in the rest of the framework.
Advisory & Consultancy (AC)
Active Ownership services (AOS)
Strategy & Governance (SG)
Reporting and Assurance (REP)
Closing Module (CM)
Research and Data Provision (RDP)

18. The Reporting Cycle

19. Reporting Timelines 5 Jan 2018 3 April 2018 July 2018 Jan 2019
Live Reporting Period
Online Tool Closed
You can start reporting from beginning of January, the deadline to submit your report is 3rd of April, so you have a three-month window to report.
With the new reporting requirement, service providers will be under the same signatory requirements as asset owner and investment manager. This means that if you do not fulfil your reporting duties by the deadline, you will be entered into a delisting process. Of course, the R&A team will be here to support you through this process so do not hesitate to get in touch with us.
On the timeline here, you can also see July 2018 marked. This is when the PRI normally publishes the public versions of you PRI reports.
During the rest of the year when the reporting is closed, the PRI analyses the data we’ve received from signatories to produce various reports and guidance documents, we engage with signatories on their reporting experience and make improvements to the framework for the coming year.
In November each year, we also publish the updated version of the reporting framework for the upcoming year, so that signatories have enough time to prepare.

20. Reporting time estimates
Rough estimates – each organisation has its unique set of circumstances and capacity
1st time reporting
Data collection (80-85%)
Reporting (15-20%)
Factors impacting the process:
Organisational readiness for ESG reporting
Size of organisation
Consistency of ESG approach across services
Data collection infrastructure, processes and liaison with various teams and staff
Responsibility for data collection: ESG specialists, compliance teams or similar
Data sharing approval and accuracy/quality checks
After information is collected:
Reporting on one module can take less than 1-2 hours
Completing the entire framework (seven modules) can take one-three days
Service providers will typically complete an average of four-six modules
The R&A team often get questions from signatories about how long it takes to report.
The reporting process is a very individual process and can look different depending on what type of organisation you are and what the reporting infrastructure looks like within the organisation.
The table you see on the slide is a rough estimate, and is split into an estimate for first time reports as well as for 2nd year reporters. As you can see, the actual reporting, i.e. manually typing in and/or selecting your responses in the Online Reporting Tool is fairly quick and can be done in a matter of days or hours. Instead, what usually takes a bit more time is all the preparation that goes into it before you actually start reporting.
Generally, it takes a bit longer to report if you are doing it for the first time. Some organisations might already have an efficient reporting and data collection infrastructure from other reporting that they do. Other organisations might need to first think about appointing someone responsible for reporting, and then setting up a good system to liaise with various teams to retrieve ESG information, depending on the size of the organisation. Once all information is collected, completing and submitting the actual report can take a few days.
However, in your second year of reporting, you would hopefully already have set up an efficient system to report within your organisation. Reporting should therefore be fairly straight forward and smooth process. The reporting tool also have a prefilling function, which means most of your responses from last year will be pre-filled into the new year. All you need to do is confirm them.
2nd year and onwards
Prefilling of previous responses saves significant time
Scale of change in ESG incorporation approach– if small, data collection and reporting likely to take from a few hours to 1-3 days to complete

21. Reporting Outputs
Once you have submitted your report, you get a number of outputs and ways of analysing it.

22. Outputs Transparency Report Private RI Report Data Portal analysis
SUBMIT AND RECEIVE YOUR OUTPUTS
The outputs include a:
Transparency report which contains all the public responses to the framework. The reporting framework consists of some indicators that you can select whether to disclose or not. If you choose not to disclose them, they will not be part of this public report. The Transparency Report is published on our website in July each year.
You will also receive a private RI-report. This report contains your responses to both public and private indicators, i.e. those indicators that I mentioned where you have an option to keep them undisclosed. PRI does not share this report with others, however signatories are free to share it at their own discretion.
All reports are available in Word, PDF and HTML versions on the Online Reporting Tool.
In 2017, PRI launched the Data Portal. It’s is a web-based platform that allows signatories to search and view transparency reports, request private reports from each other and analyse data in a customisable view. The PRI is working on having SPs private and public reports on this interactive platform as well.
Transparency Report
Private RI Report
Data Portal analysis
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23. Future Developments

24. Continuing to work with the Service Provider industry
Service Providers will not be assessed this year.
In 2018 – PRI to explore scoring of Service Provider responses
Collecting opinions of signatories and the PRI Board
Analysis of possibilities/challenges
Presenting proposed approach to the PRI Board
PRI paper: Examining investment consultants in a sustainable financial system
The PRI working on increasing Data Portal user functionalities for Service Provider reports. This will help:
Enhance dialogue between signatories
Improve knowledge sharing among Service Providers
We often get questions from service provider signatories on whether their responses are going to be assessed and if will they get scores. This year, the PRI will not be assessing your reports.
During 2018 PRI will explore whether scoring of Service Provider responses is possible and whether there is an appetite for it, as well as weigh the risks and opportunities of it. We will:
Collect opinions of signatories and the PRI Board
Analyse the Reporting Framework’s suitability for scoring and possibilities/challenges of a scoring methodology
And then present the proposed approach to the Board in late 2018 or early 2019
As you might have already seen, the PRI released a paper on the investment consultant industry and found a number of barriers to it contributing to a sustainable financial system. The PRI has now embarked on a wider consultation to collect opinions from asset owners and asset consultants on the paper and its findings. There will be events and workshops around the world and this will then result in a number of PRI-led projects to address these barriers.
As I mentioned, PRI is working on having Service Provider reports uploaded to the Data Portal from 2018, and to also increase other user functionalities like requesting private reports from others. We believe this can help to:
Enable more dialogue between Service Providers and investor signatories
And it will also allow Service Providers to better understand the type of ESG services required by Asset Owners/Investment Managers
It could also improve knowledge sharing among Service Providers if greater access is given
From 2018, investor signatories will have minimum requirements in place which means that they need to meet certain criteria in order to continue being a PRI signatory. For instance, they have to have an investments policy that covers their RI approach, and they have to have internal or external staff responsible for implementing RI policy. Investor signatories will also be able to showcase advanced RI-practices through a new leadership resource in late This is a result of PRI’s public consultation in 2017 where we received input from over 300 signatories on how PRI can increase accountability.
In the future, something similar might become relevant for service provider signatories as well. This would be carefully evaluated by PRI first, and we would draw heavily on the opinions of our signatory base.
Minimum requirements and leadership:
Only applicable to asset owner and investment manager signatories
Consultation process first, if deemed relevant for service providers in the future
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25. FAQs
Will our report be assessed? – No, not in PRI will however start exploring the possibility of an assessment methodology for service provider signatories, and will consult with signatories and other stakeholders.
When is the deadline to submit my report? – You have to submit your report by 3 April If you do not submit on time, you will be entered into a delisting process.
How can I share my responses to indicators, so that colleagues can review before submission? – You can download a blank data collection form on the start page of the Online Reporting Tool, you can flag indicators and download a draft of your report, and you can also share specific indicators with colleagues through the ‘Share page’ function on the Online Reporting Tool.
How long does it usually take to report? – It depends on your organisational set up and whether you already have an efficient reporting infrastructure set up. It also depends on whether you reported last year, which would make your second year quicker. See slide 20 for a rough estimate.

26. Resources and contact
Dedicated page for service providers on: service-providers :
Try the interactive diagram on reporting
Browse through supportive documentation on how to report, main definitions and recorded webinars
View the offline PDF modules
Online Reporting Tool - more guidance here
Log in to the Online Reporting Tool and start reporting today!
New user or forgot your password? Go here first
Phone support
+44 (0)
support
On the unpri.org website, we have a dedicate page just for service providers. Most of the resources that you will need are on this page. For instance, you have a list of key definitions used in the reporting framework, an overview and guidance document on reporting, as well as all the modules in PDF format.
We also have some guidance on how to navigate through the Online Reporting Tool – see link on the slide.
And finally, I have linked to the Online Reporting Tool so that you can go in and start reporting already today.