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Are these policies legal requirements or voluntary commitments?
There is no single responsible-investment rule that applies identically to every bank and fund manager worldwide. Three kinds of expectations need to be distinguished:
- Law and regulation: Binding duties depend on the jurisdiction and the activity—for example, the particular investment, lending, or underwriting business involved. Without specifying those details, it is not possible to state a universal legal obligation.
- Signatory commitments: Institutions that join an initiative undertake to meet its framework. These commitments apply to the signatories covered by that framework, not automatically to every institution in the market.
- Guidance: Guidance such as the OECD’s responsible-business-conduct recommendations describes due-diligence practices and how organizations can put responsible-business standards into operation. It should not be presented as a universal law.
For eligible asset-owner and investment-manager signatories, the Principles for Responsible Investment (PRI) identifies three minimum expectations: a responsible-investment policy, clear senior-level oversight, and staff responsible for implementing the policy. These are PRI signatory expectations, not proof that all funds or managers face the same legal rule. The PRI’s Signatory minimum requirements sets out this framework.
UNEP Finance Initiative (UNEP FI) says any bank may become a signatory to its Principles for Responsible Banking, subject to a CEO-signed commitment and UNEP FI membership. Signatories are expected to show discernible progress toward full implementation. The Principles are designed to reflect each bank’s local context, material impacts, and circumstances.
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What should a working policy put into practice?
A useful policy is more than a statement of values. It should connect the commitment to decisions, responsibility, action, and review. OECD due-diligence guidance describes the process as ongoing, responsive, and risk-based, with prevention of adverse impacts as the priority and meaningful stakeholder engagement informing the work.
- Set the mandate and assign responsibility. Put the commitment and relevant standards in writing. Identify who provides senior oversight and which staff are responsible for implementation. For PRI signatories, the policy, senior oversight, and implementation staff are explicit minimum expectations.
- Assess where material risks and impacts arise. Make the assessment risk-based and consider the institution’s operations, products or services, business relationships, portfolio, asset classes, sectors, and relevant geographies. For climate, OECD guidance for investors calls for assessment at portfolio, asset, asset-class, and sector levels.
- Choose methods suited to the institution’s role. Fund managers can integrate sustainability and governance considerations into investment analysis, apply positive or negative screens, invest thematically, or combine these approaches. Depending on their holdings and influence, they can also engage with investee companies and use ownership and stewardship. Banks need to consider impacts and risks across their business, portfolio, and transactions; lending and underwriting require due-diligence processes adapted to those activities.
- Prevent harm and respond when it occurs. OECD guidance puts prevention first, then calls for mitigating or addressing impacts where prevention is not possible. Investor responses may include engagement, active ownership, stewardship, and portfolio allocation. For project and asset finance, OECD guidance also highlights stakeholder engagement, reporting, and remediation.
- Track implementation and communicate. Monitor whether the institution is carrying out its policy and meeting its targets, as well as the efforts of investee companies or clients to prevent and mitigate impacts. Explain to stakeholders how risks and impacts are managed. A written policy by itself does not show that these measures are effective.
How do expectations differ for banks and fund managers?
The frameworks overlap in their focus on identifying and addressing risks, but their reach and emphasis differ. A fund manager’s policy centers on investment decisions and ownership; a bank’s framework must also account for its institution-wide strategy, portfolio, and transactions.
| Framework | Who it addresses | What to look for |
|---|---|---|
| PRI responsible investment and signatory requirements | Asset owners and investment managers, especially signatories eligible for annual reporting | A policy, senior oversight, and implementation staff, alongside investment integration, screening, thematic approaches, and stewardship. Source: PRI, What is responsible investment? and Signatory minimum requirements. |
| OECD responsible-business-conduct due diligence | Institutional investors, lenders, underwriters, and other enterprises covered by the relevant guidance | Ongoing, risk-based due diligence to identify, prevent, mitigate, track, and communicate adverse impacts on people and the environment. Sources: OECD, Responsible business conduct in the financial sector and Recommendation on the OECD Due Diligence Guidance for Responsible Business Conduct. |
| UNEP FI Principles for Responsible Banking | Signatory banks | Implementation across strategy, portfolio, and transactions, including assessment, strategy, and action related to climate, nature, human rights, and healthy and inclusive economies. Source: UNEP FI, About the Principles. |
How can you assess whether a policy is specific and credible?
When comparing policies, look beyond labels such as “ESG” or “responsible.” The following questions help reveal what the institution has actually committed to do:
- Scope: Does the policy say which assets, lending, underwriting, subsidiaries, and business relationships it covers?
- Prioritization: Does it explain how the institution decides which impacts matter most, including by sector and geography?
- Methods: Does it describe how investment integration, screening, engagement, allocation, or transaction-level due diligence informs decisions?
- Accountability: Are senior oversight and implementation responsibilities clear?
- Escalation and remedy: Does it explain what happens when prevention fails or a client or investee company does not address an impact?
- Measurement and transparency: Are targets, progress, results, and reporting described clearly enough to assess performance?
These checks do not establish that an institution has achieved good outcomes. They help distinguish a policy with defined responsibilities and processes from a broad commitment that leaves its scope and implementation unclear.
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What do the available figures—and their limits—show?
The PRI’s What is responsible investment?, updated 28 April 2026, says that around 75% of signatories explicitly link their responsible-investment activities to fiduciary duties in their policies, based on PRI 2025 reporting data. That figure describes policies reported by PRI signatories; it does not establish the quality of implementation or the results achieved.
UNEP’s Principles for Responsible Banking 2025 Progress Report, published 15 October 2025, says the report provides data and analysis on more than 350 banks in more than 85 countries, representing more than 50% of global banking assets. This describes the report’s coverage, not the performance of every bank or every bank worldwide.
Data quality also limits what outsiders can verify. OECD’s Due diligence essentials for responsible banking and capital markets, published 6 April 2026, notes information deficits and the risk of greenwashing or unsubstantiated sustainability claims. It cites an estimate that only around 5,000–10,000 of roughly 80,000 multinational companies publish environmental and social performance reports. Incomplete or uneven company information can therefore make it harder to assess risks and confirm whether policies are working.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Do responsible-investment policies cover more than climate?
Yes. Climate is an important area for due diligence, but the frameworks described here address broader environmental and social impacts, including nature and human rights. OECD guidance concerns impacts on people and the environment; UNEP FI’s banking framework includes climate, nature, human rights, and healthy and inclusive economies. A policy that discusses emissions alone may therefore leave other material areas unexplained.
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