Three drop out of UN PRI

The UN PRI also said five members have been de-listed for failing to comply with mandatory reporting requirements.

Aside from NYSTRS, the others who voluntarily left were the US-based Mennonite Mutual Aid (MMA) and the Rapaki Property Group in New Zealand.

NYSTRS spokesman John Cardillo said: "NYSTRS voluntarily withdrew active participation in PRI, but we continue to support strong corporate governance principles through our participation in the Council of Institutional Investors and Ceres."

MMA director of stewardship investing Mark Regier said the retail faith-based investment firm didn't have the resources to comply with the somewhat "onerous reporting requirements". MMA manages $1.5bn in assets that are chosen through faith-based screens.

"We have been and continue to be a strong supporter of the UN PRI," said Regier.

"But one of the things we've noticed with our focus, particularly in the retail community...is that this type of high-end thought level, it just doesn't connect well with our clients. Our people don't hear about it, they don't know about it. We have to focus on things that add value to our base," he said.

The three-year-old principles provide a framework for investors to include environmental, social and governance factors into their investment decisions. There are currently 573 institutions that have agreed to sign up.

Meanwhile, five organisations were de-listed for failing to participate in the mandatory annual survey. The five are: DESBAN, Christopher Reynolds Foundation, Foresters Community Finance, Oasis Group Holdings and Trinity Holdings.

The de-listings come as the initiative said it launched the process of consulting members on how to increase transparency by 2011.

UN PRI executive director James Gifford said: "Signatories should be sufficiently transparent to ensure their clients, customers, members and other stakeholders have a clear sense of their responsible investment processes, activities and capabilities."

Watson Wyatt investment consultant Jane Goodland said the new guidelines may lead others to drop the initiative.

"It's probably a positive development," she said. "It looks like PRI are starting to apply some rigour...so you have to demonstrate progress to remain a signatory."