Charlottesville, VA: The CFA Institute has published its first ESG disclosure standards for investment products. The association for investment professionals said the voluntary standards will provide investors with information about how investment products align their objectives, investment processes and stewardship activities with ESG considerations.
Margaret Franklin, president and chief executive of the CFA Institute, said the complexities of the ESG investing landscape remained vast.
“We must identify ways to mitigate greenwashing (or social washing) and preserve the integrity of the information being shared about ESG investment products to make them more understandable and comparable to the end investor,” she said.
“The release of the standards marks one step in the broader efforts to make that a reality, and we believe an important one.”
The standards have been developed following two industry-wide consultations.
Paul Andrews, managing director of research, advocacy, and standards at the CFA Institute, said: “Although there are differing regulations in global markets to address transparency for investors on ESG matters, it is critically important that a harmonised, global approach exists to enable investor protection.The CFA Institute is a worldwide not-for-profit professional organization dedicated to offering finance education to investors. It works toward the goal of enhancing the standards of ethics, education, and professional excellence in the global investing industry.
In summary, this article goes on to state how the CFA institute has published voluntary guidelines on ESG disclosures, and how it is somewhat similar to the climate-related financial information that was published recently in the United Kingdom.
The article includes quotes from Paul Andrews and Margaret Franklin of the CFA Institute, and adds some background information with regards to what ESG means and why it might be important.
In conclusion it suggests that ESG might be the next big thing in the investment industry (The next wave) , but that more research is needed.
Investors are increasingly looking for ways to integrate environmental, social and governance factors into their portfolios with some even seeking to divest from companies with negative impacts on these areas.
The CFA Institute has published voluntary guidelines with regards to disclosure of ESG information that can be used by investors, although there is a possibility that it might be replaced with mandatory regulation in the future. All of which would be based on the UN’s Principles of Responsible Investment.
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ESG: The New Way of Doing Business in Charlottesville, VA
Business and organizational sustainability is a complex issue in Charlottesville, with many stakeholders and perspectives. It’s also an area where the stakes are high – if we don’t get it right, there will be dire consequences for our communities and the planet.
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You may also want to read What are ESG Certifications?