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CFA Institute Releases Global ESG Disclosure Standards for Investment Products

New Standards mark the first global voluntary standards for disclosing how investment products consider ESG issues in objectives, investment strategy, and stewardship

New York City, United States 01 Nov 2021

CFA Institute, the global association of investment professionals, announces the release of the first voluntary Global ESG Disclosure Standards for Investment Products (“the Standards”) designed to enable investors, consultants, advisors, and distributors to better understand, compare, and evaluate ESG investment products.

 

Today’s release follows an industry-wide consultation to create Standards that are based on the principles of fair representation and full disclosure of environmental, social, and governance issues within the objectives, investment process, and stewardship activities of investment products. The Standards apply to all types of investment vehicles, asset classes, and ESG approaches, and aim to support investors with information that is complete, reliable, consistent, clear, and accessible.

 

Margaret Franklin, CFA, President and CEO, CFA Institute, comments:

 

“We’re proud to release the first edition of the Standards after a multi-stage development process to ensure the result is additive, has impact, and is meaningful to the industry. The complexities of the ESG investing landscape remain vast. We must identify ways to mitigate greenwashing and preserve the integrity of the information being shared about ESG investment products to make them more understandable and comparable to the end investor. The release of the Standards marks one step in the broader efforts to make that a reality -- and we believe an important one.”

 

Paul Andrews, Managing Director for Research, Advocacy, and Standards at CFA Institute comments:

 

“Although there are differing regulations in global markets to address transparency for investors on ESG matters, it is critically important that a harmonized, global approach exists to enable investor protection. Furthermore, such regulation does not always comprehensively cover all market participants.  The Standards fill these market needs on a global scale, facilitating important disclosures that will drive greater communication between the buyers of investment products and an industry marketing increasing numbers of funds and strategies that offer an ESG-centric approach.”

 

Two rounds of public consultation informed the first edition of the Global ESG Disclosure Standards for Investment Products. In August 2020, CFA Institute published an initial Consultation Paper seeking industry, regulatory, and public comment on the proposed scope, structure, and design principles for the Standards. In May 2021, CFA Institute released an Exposure Draft of the Standards. The Standards are jointly approved by CFA Institute and its ESG Technical Committee, chaired by Bruno Bertocci, Managing Director, Head of Sustainability in Active Equities, UBS Asset Management, United States. Industry leaders who have volunteered to serve on the CFA Institute ESG Technical Committee, ESG Verification Subcommittee, and ESG Working Group have been instrumental in the development of the Standards.

 

To view the Global ESG Standards for Investment Products, including sample ESG Disclosure Statements, visit: here

 

For further information, please contact [email protected]

Notes to Editors

Materials concerning the development of the Global ESG Disclosure Standards for Investment Products, including the Consultation Paper, Exposure Draft and Comment Letters, are available here.

 

Additional materials to be released in early 2022 include procedures for independent assurance of investment product ESG disclosures, a handbook that explains the provisions of the Standards and that provides interpretative guidance, and an optional template for ESG Disclosure Statements to facilitate easier comparison between products.

 

The Global ESG Disclosure Standards for Investment Products Standards do not address:

  • corporate ESG reporting
  • firm-level ESG disclosures (with an exception related to stewardship activities)
  • ·naming, labelling, or rating of investment products, or
  • the content of investment products’ periodic reports

About CFA Institute

CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion of ethical behavior in investment markets and a respected source of knowledge in the global financial community. Our aim is to create an environment where investors’ interests come first, markets function at their best, and economies grow. There are more than 175,000 CFA® charterholders worldwide in more than 160 markets. CFA Institute has nine offices worldwide and 160 local societies. For more information, visit www.cfainstitute.org or follow us on LinkedIn and Twitter at @CFAInstitute.