Principles for Responsible Investment (PRI) is considering including emerging markets in future expansions of its sovereign climate engagement initiative, confirming, however, its current focus remains on developed countries, starting with Japan and Canada.
Originally set up in 2022, the Collaborative Sovereign Engagement on Climate Change programme had until recently focused on Australia, but the initiative now has the participation of 41 signatories with €14.6trn in assets from Asia Pacific, Europe and North America.
In its 2025 progress report, Collaborative Sovereign Engagement on Climate Change, PRI announced it was continuing to develop the initiative beyond its Australian pilot phase into a multi-market programme by establishing new engagement programmes in Canada and Japan.
“In Canada, this expansion will take the form of a full, multi-year engagement programme, seeking to engage with governments and policy makers across the system, following a similar structure to Australia,” the report stated.
In Japan, PRI added that it will support investors engage with governments and policy makers through a preliminary engagement programme in the first instance, which will be reviewed after one year.
Prospects for EM expansion
Last year, the PRI said that it would not include emerging markets in the first expansion phase of a sovereign climate engagement initiative, opting instead to focus on developed economies.
At the time of the announcement, Tom Arup, PRI’s head of stewardship and sovereign engagement, said PRI wanted time to consider important dynamics, such as debt traps, the interaction with multilateral development banks and other issues related to emerging economies before integrating them into the engagement programme.
PRI added that it will review prospects for additional programmes on an ongoing basis, adding that it plans to consult with investors on prospects for an emerging market engagement programme in 2025-2026.
“Based on the feedback received during the FY 2024-25 consultation process, we recognise that signatories are interested in engaging with emerging market governments on climate change issues,” the report added.
NDCs
Looking ahead, PRI said it will ensure engagement priority areas remain focused on financially material climate risks and opportunities aligned with sovereigns’ climate commitments, such as progress on investable Nationally Determined Contributions (NDCs), sovereign disclosure, transition finance, methane abatement, and labelled bond reporting.
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