PRI Reporting Framework 
Main definitions 
 
 
 
 
 
 
 
 
November 2018 
reporting@unpri.org 
+44 (0) 20 3714 3187

2 
Table of Contents 
 
Introduction 
2 
ESG issues 
3 
Active/ Passive investments 
4 
ESG incorporation 
5 
Active ownership and engagement 
8 
Definitions for service provider reporting  
 
 
 
 
 
         11 
 
 
 
Introduction 
This document presents some of the main and most frequently used definitions in the PRI 
Reporting Framework. These definitions are presented here as their use is either frequent and/or 
key for preparing to report, as well as to understand the reported information by other signatories. 
In the offline version of the Reporting Framework, you will not find these definitions repeated in 
each indicator, so it is key that you look at these general definitions here.

3 
ESG issues 
Definition 
ENVIRONMENT, SOCIAL AND GOVERNANCE ISSUES 
A definitive list of environmental, social and governance (ESG) issues does not exist.  It would not be possible 
or desirable to produce a list, or a set of definitions, that claimed to be exhaustive or definitive. Any such list 
would inevitably be incomplete and would soon be out of date. 
Nonetheless, the table below provides examples of ESG issues, for guidance purposes. This is intended primarily 
for signatories who are relatively new to responsible investment and to the PRI.  Some modules (e.g. Property) 
provides examples of ESG issues that are specific to that  sector or asset class. 
Environmental (E) 
Issues relating to the quality and functioning of the natural environment and natural 
systems.  These include: biodiversity loss; greenhouse gas (GHG) emissions, climate 
change, renewable energy, energy efficiency, air, water or resource depletion or  
pollution,  waste management, stratospheric ozone depletion, changes in land use, 
ocean acidification and changes to the nitrogen and phosphorus cycles. 
Social (S) 
Issues relating to the rights, well-being and interests of people and communities.  
These include: human rights,  labour standards in the supply chain, child, slave and 
bonded labour, workplace health and safety, freedom of association and freedom of 
expression, human capital management and employee relations; diversity; relations 
with local communities, activities in conflict zones, health and access to medicine, 
HIV/AIDS, consumer protection; and controversial weapons. 
Governance (G) 
Issues relating to the governance of companies and other investee entities.  In the 
listed equity context these include: board structure, size, diversity, skills and 
independence, executive pay, shareholder rights, stakeholder interaction, disclosure 
of information, business ethics, bribery and corruption, internal controls and risk 
management, and, in general, issues dealing with the relationship between a 
company’s management, its board, its shareholders and its other stakeholders. This 
category may also include matters of business strategy, encompassing both the 
implications of business strategy for environmental and social issues, and how the 
strategy is to be implemented. 
In the unlisted asset classes governance issues also include matters of fund 
governance, such as the powers of Advisory Committees, valuation issues, fee 
structures, etc. 
Numerous organisations and projects have identified ESG issues by sector, together with associated key 
performance indicators.   Examples include: 
• 
The European Federation of Financial Analysts Societies (EFFAS): KPIs for ESG - A Guideline for the 
Integration of ESG into Financial Analysis and Corporate Valuation 
• 
The CFA Institute: Environmental, Social and Governance Factors at Listed Companies - A Manual for 
Investors 
• 
UNEP FI and WBCSD: Translating environmental, social and governance factors into business value 
ESG research providers and brokers are also well placed to provide advice in this area.

4 
Active/ Passive investments 
Definition 
ACTIVELY AND PASSIVELY MANAGED STRATEGIES 
Passive strategies 
Passive investments are investments which mirror the performance of an index and 
follow a pre-determined buy and hold strategy that does not involve active 
forecasting. Examples include investments in broad capital market indices, ESG 
weighted indices, themed indices, passive managed ETFs or indices with ESG-
based exclusions. 
More detail on ESG integration for passive investors can be found later in this 
document.  
Active - quantitative 
(quant) strategies 
Investment strategies or funds where the manager builds computer-based models to 
determine whether an investment is attractive. In a pure "quant model" the final 
decision to buy or sell is made by the model.  
More detail on ESG integration for active investors can be found later in this 
document. 
Active - fundamental  
Fundamental strategies in which investment decisions are based on human 
judgment.  This includes both bottom-up (e.g. stock-picking) and top-down (e.g. 
sector-based) strategies. 
More detail on ESG integration for active investors can be found later in this 
document. 
Active - other  
Strategies that do not match any of the above strategies. These may be active 
strategies that combine active quant and active fundamental strategies, or other 
strategies that you believe do not fit at all the above definitions. You may clarify your 
strategy in Additional Information field. 
More detail on ESG integration for active investors can be found later in this 
document.

5 
ESG incorporation 
Definition 
ESG INCORPORATION 
Incorporation of ESG issues into investment analysis and decision-making processes is covered in Principle 1 of 
the PRI.  
Throughout the Reporting Framework, we refer to ESG incorporation as the review and use of ESG information 
in the investment decision-making process. The Reporting Framework addresses four ways in which this can be 
done: 
1. 
Screening 
2. 
Sustainability themed investment (also referred to as environmentally and socially themed investment) 
3. 
Integration of ESG issues 
4. 
A combination of the above 
Assets subject to an engagement approach only and not subject to any of the above strategies should not be 
included in ESG incorporation. 
To improve standardisation and communication in the responsible investment industry, the PRI is aligning its 
definitions with those of the Global Sustainable Investment Alliance. These are presented below for convenience. 
Screening of 
investments 
The definitions of the three types of screening in the Reporting Framework are: 
a. Negative/exclusionary screening: The exclusion from a fund or portfolio of certain 
sectors, companies or practices based on specific ESG criteria; 
b. Positive/best-in-class screening: Investment in sectors, companies or projects 
selected for positive ESG performance relative to industry peers; 
c. Norms-based screening: Screening of investments against minimum standards of 
business practice based on international norms. Norms-based screening involves 
either: 
- 
defining the investment universe based on investees’ performance on 
international norms related to responsible investment/ESG issues, or 
- 
excluding investees from portfolios after investment if they are found 
following research, and sometimes engagement, to contravene these norms. 
Such norms include but are not limited to the UN Global Compact Principles, 
the Universal Declaration of Human Rights, International Labour 
Organization standards, the United Nations Convention Against Corruption 
and the OECD Guidelines for Multinational Enterprises. 
Sustainability 
themed investing 
Investment in themes or assets specifically related to sustainability (for example clean 
energy, green technology or sustainable agriculture). 
Integration of ESG 
issues 
PRI defines this as the systematic and explicit inclusion of material ESG factors into 
investment analysis and investment decisions 
Investment decision-making processes 
For the purposes of the Reporting Framework, investment decision making processes refers to research, 
analysis and other processes that lead to a decision to make or retain an investment ( i.e. to buy, sell or hold a 
security), or to commit capital to an unlisted fund or other asset.   
(Proxy) voting decisions and engagement activities are not classified as investment decisions for the purposes 
of the Reporting Framework.  These decisions fall under Principle 2 of the PRI, relating to active ownership, and 
within the Listed Equity – Active Ownership (LEA) module of the Framework.

6 
FURTHER EXPLANATION OF DEFINITIONS FOR ACTIVE STRATEGIES 
Screening  
Screening covers both screening conducted under a manager’s own policy and 
client-directed screening.  
Negative/exclusionary screening and positive/best-in-class screening are based 
on criteria defined in a variety of ways: by product, activity, sector, geographic region 
or management practices.  
Norms-based screening involves either: i) defining the investment universe based 
on investees’ performance on international norms related to responsible 
investment/ESG issues, or ii) excluding investees from portfolios after investment if 
they are found following research, and sometimes engagement, to contravene these 
norms. Such norms include but are not limited to the UN Global Compact Principles, 
the Universal Declaration of Human Rights, International Labour Organization 
standards, the United Nations Convention Against Corruption and the OECD 
Guidelines for Multinational Enterprises. 
Sustainability 
themed investing 
Sustainability themed investing involves the selection of assets that contribute to 
addressing sustainability challenges such as climate change or water scarcity. Funds 
can either be single-themed or multi-themed. For the purpose of this Reporting 
Framework, we use interchangeably the term environmental and social  themed 
and sustainability themed investments.  
Integration of ESG 
issues 
Integration of ESG issues  encompasses the use of qualitative and quantitative ESG 
information in investment processes, with the objective of enhancing investment 
decision-making.  Integration of ESG issues can be used to inform economic analysis 
and industry analysis. It can be used at the portfolio level, by taking into account ESG-
related trends such as climate change, or at the stock, issuer, or investee level. The 
term is used interchangeably with ESG integration or integrated analysis. 
Integrated analysis for active stock-picking or other equity investments includes 
analysing how ESG issues can affect a company’s balance sheet, income statement 
or cash flow models, by affecting costs, revenues, and business growth assumptions 
(i.e. in the estimation of a company’s fundamental value). Integrated analysis for 
active bond-picking and other debt funds involves analysing how ESG issues can 
affect an issuer’s creditworthiness. This type of analysis can also be used by funds 
that pick bond issuers using quantitative modelling. Integrated analysis for both 
equities and debt includes an assessment  of a company’s quality of management 
and the business risks and opportunities it faces related to ESG issues, allowing 
comparisons between companies.  
For examples of how investors are conducting integrated analysis for listed equities, 
see Integrated Analysis: How Investors Are Addressing Environmental, Social and 
Governance Factors in Fundamental Equity Valuation, published by the PRI in 
February 2013.  
Combined 
approaches 
Combined approaches might include for example: 
• 
Establishing a sustainable agriculture thematic fund that screens out 
companies involved in producing tobacco and uses integrated analysis to 
select companies for inclusion in the fund. 
• 
Running a fund that applies 20 negative screens to determine the investible 
universe and uses integrated analysis to select companies for investment from 
within the investible universe. 
• 
Running a global equities fund using integrated analysis to select stocks 
combined with a norms-based approach, investigating any serious alleged 
breaches of selected international norms and divesting companies found to be 
in serious breach of a norm (often after engagement).

7 
FURTHER EXPLANATION OF DEFINITIONS FOR PASSIVE STRATEGIES 
Screening  
Screening may include the use of indices constructed from an eligible universe based 
on the ESG characteristics of a company or country, but in which ESG issues do not 
play a part in the weighting of those companies or countries within the index. This may 
include indices constructed using ESG best-in-class or positive selection 
methodologies which identify securities for index inclusion (e.g. FTSE4Good, Dow 
Jones sustainability and MSCI ESG indices) or indices that exclude particular 
companies or countries (e.g. on the basis of products or activities). Exclusions may 
also be activity-based (i.e. exclude securities on the basis of their industry or business 
activities, for example, tobacco or controversial weapon screens), or location-based 
(i.e. exclude securities from companies who operate in certain countries, or the 
sovereign debt from those countries). Alternatively, there may be norms-based 
exclusions (i.e. indices which exclude securities of issuers considered to have broken 
certain minimum standards of business conduct based on international norms, such 
as the UN Global Compact). 
Sustainability 
themed investments 
Sustainability themed investments cover passive funds investing in companies linked 
to specific themes (e.g. indices focused entirely on environmental and social themes 
such as clean technology, climate change, microfinance and impact investing). 
Integration of ESG 
issues 
Integration of ESG issues typically alternative weighted ESG indices in which 
constituent security weights take account of the ESG characteristics of the company 
or country.

8 
Active ownership and engagement 
Definition  
ACTIVE OWNERSHIP AND ENGAGEMENT 
Active ownership  
Active ownership is the use of the rights and position of ownership to influence the 
activity or behaviour of investees. This can be applied differently in each asset class. 
For listed equities it includes both engagement and (proxy) voting (including filing 
shareholder resolutions). For other asset classes (e.g. fixed income), engagement 
may still be relevant while (proxy) voting may not. 
Engagement  
Engagement refers to interactions between the investor and current or potential 
investees (which may be companies, governments, municipalities, etc.) on ESG 
issues. Engagements are undertaken to influence (or identify the need to influence) 
ESG practices and/or improve ESG disclosure.   
(Proxy) voting and 
shareholder 
resolutions 
Voting refers to voting on management and/or shareholder resolutions as well as filing 
shareholder resolutions. 
 
FURTHER EXPLANATION OF DEFINITIONS FOR ENGAGEMENT 
Do not include the following as engagements: 
• 
Interactions with companies for data collection and/or research purposes related to  buy/hold/sell/weight 
decisions.   
• 
Standard questionnaires sent to  companies for the purposes of information gathering and investment 
decision-making related to Principle 1 only (e.g. on products, or ESG policies and performance, for 
screening purposes). 
• 
Attendance at a company presentation, AGM or other company meeting without interactions or 
discussion.  
• 
CDP’s disclosure requests on GHG emissions, water and forests. These are not captured as 
engagements but are reported in Strategy and Governance (SG). 
• 
Press releases an investor may publish regarding a practice an investee is undertaking which the 
investor is aiming to change. 
Interactions intended to influence public policy or industry bodies defining best practices may not necessarily 
relate to specific underlying assets. Hence, do not report these in the asset class modules, but in the Strategy 
and Governance (SG) module.

9 
ENGAGEMENTS SPLIT BY WHO CONDUCTS THEM 
There are many different configurations of engagement. Investors engage with companies directly in their 
own name, in collaboration with other investors and through commercial service providers. The distinctions 
between these are not always clear-cut. Please use the definitions below and your best professional 
judgement when deciding how to classify your engagement. Review the process indicators for each category 
(LEA 03-04 for internal; LEA 05-06 for collaborative; and LEA 07-08 for service providers) and determine 
which indicator/s best fit your business model. 
Please contact the Reporting and Assessment team if you require additional clarification.       
Individual/ Internal 
staff engagement 
The defining characteristics of an individual/internal staff engagement  are: 
• 
it is carried out by your internal staff alone, with no involvement or support from 
other investors, investor networks or service provider 
• 
it is conducted in the name of your organisation (i.e. the companies with which 
you engage can identify your organisation individually) and you do not act on 
behalf of other organisations.   
Joining the CDP should not be counted as an engagement but reported as part of 
the way you support responsible investment in Organisational Approach OA10. 
However, if your organisation engages in its own name with companies on their 
carbon emissions, water or forest footprint disclosure as a follow-up to CDP 
disclosure requests, you should report these engagements as individual/internal 
staff engagements.  
Collaborative 
engagement 
Collaborative engagement is engagement that an investor conducts jointly with 
other investors.  This might include: 
• 
groups of investors working together without the involvement of a formal 
investor network or other membership organisation. 
• 
groups of investors working together with the support of a formal investor 
network or other membership organisation, including the PRI initiative.. 
Collaborative engagements might require different levels of involvement from 
participating investors. In some examples, formal networks provide support in terms 
of coordinating calls, defining objectives, tracking activities and measuring outcomes. 
In other circumstances, these activities are managed independently by investors in 
the coalition. Additionally, some members might have more a leading role than others 
(see further definition under engagement effort), Nonetheless, collaborative 
engagements included in this category should require the individual members to 
allocate some resources to and the engagement/or share information and expertise 
within the group. 
Collaborative engagements posted on the Clearinghouse and/or coordinated by the 
PRI staff (i.e. Investor Engagements team) should be included in this indicator. 
 Joining the CDP should not be counted as an engagement but reported as part of 
the way you support responsible investment in Organisational Approach OA10. 
However, if your organisation engages with a group of investors in its own name with 
companies on their carbon emissions, water or forest footprint disclosure as a follow-
up to CDP disclosure requests, you should report these engagements as 
collaborative engagements. 
Service provider 
engagement 
Service provider engagements include  engagements conducted via: 
• 
commercial parties that provide stand-alone engagement services, without 
managing their clients’ underlying assets. 
• 
investor organisations that conduct engagement on their members’ behalf, 
and which have an explicit mandate from their members to represent them. 
These include engagements conducted entirely on an outsourced basis as well as 
those facilitated by the service provider but the investor’s own staff undertake some 
of the engagement activity.

10 
ENGAGEMENT INTENSITY AND EFFORT 
Investors interact with companies and issuers at different levels of intensity and effort. The levels of intensity 
and effort are defined below. 
 
Definition  
ENGAGEMENT INTENSITY 
Comprehensive 
engagement  
(for all engagement 
types) 
A comprehensive engagement  includes multiple, substantive, detailed 
discussions or interactions with a company (e.g. letters, meetings and calls) 
relating to a particular ESG issue.     
 
Definition 
ENGAGEMENT EFFORT 
Leading role  
(for collaborative 
engagements) 
Defined as writing and/or following up on joint letters, regularly joining group 
conference calls, leading dialogue with companies, participating in some meetings 
with companies organised by other investors, and sharing relevant information on 
the topic and companies with other members of the collaboration. 
Note that leading investors cover all the activities mentioned above. Joining group 
conference calls, participating in some meetings with companies organized by 
other investors and sharing information alone will not constitute a leading role. 
High involvement 
engagements  
(for service provider 
engagements) 
Defined as situations where you: 
• 
spend significant time and effort setting goals and objectives for specific 
engagements and monitor them proactively; and/or, 
• 
wrote or followed up on joint letters with the service provider (possibly 
alongside other investors); and/or, 
• 
regularly joined group conference calls; and/or, 
• 
participated in some meetings with companies organised by the service 
provider.

11 
Definitions for service provider reporting  
 
Definition  
 
Core business 
offering(s)/main 
business activity 
The Service Provider Reporting Framework will ask organisations to select which their 
core business offering(s) or main business activity is.  
For dedicated service providers this indicates the main services that you offer to clients 
that form an essential part of your organisation’s activities. The core business 
offering/main business activity is often the main source of a company’s profits and/or 
revenue and sometimes the activity the company was originally set up to carry out, i.e. 
their main reason for being.  
For investment managers, this relates to the services that you also provide that form a 
substantial part of your non-investment business activity. 
 
 
Definition 
SERVICE PROVIDER CATEGORIES 
Investment 
Consultancy (IC) 
Provision of financial or non-financial advice on a retainer or ad hoc basis relating to 
environmental, social, and/or governance aspects of investment activity. Services 
provided do not include active investment management and fiduciary management, or 
CSR/corporate sustainability services. Examples of investment consultancy services 
include, custodial services, investment policy development, strategic asset allocation, 
investment research and manager selection and monitoring. 
Active Ownership 
Services (AOS) 
Active ownership is the use of the rights and position of ownership to influence the 
activity or behaviour of investees.  
Active ownership services provided at any stage of engagement activities for investors, 
including engagement or engagement support services, research, and advice. Activity 
can be individual or collaborative. Services related to any stage of proxy voting, 
including voting execution and voting advisory. This category includes advice or 
services related to shareholder resolutions. Activity may also include engagement with 
policy makers or regulators. This category does not include service providers that only 
inform their clients of voting outcomes, e.g. as part of a custodial role or similar, or 
service providers that only provide a platform for voting. 
Reporting and 
Assurance (REP) 
Services relating to the preparation and presentation of corporate, sustainability or 
integrated reporting, and financial reporting for clients. This category also includes 
audit, and external assurance services for clients. 
Other types of reporting, such as reporting on assets and the performance of investment 
managers is not covered by this category. 
Research and Data 
Provision (RDP) 
Collection and preparation of raw data, ratings, or analysis of ESG related information 
or issues. Offerings may be off the shelf or client tailored. This category includes 
brokerage firms. Activities that are intended to provide strategic advice or affect 
investment strategy or key decision making should be reported under Investment 
Consulting Services instead.  
Examples of research and data provision services include, but are not limited to, 
analysis, benchmarking reports, ratings, raw data and surveys. 
Other 
In this instance, ‘Other’ will apply to any service provider signatory that does not offer 
any of the above services. If you report ‘Other’ in the Service Provider Reporting 
Framework, a separate indicator will be activated that will allow you to describe this 
business activity.