In January, the CFA Institute leadership team released an updated ESG policy statement to address the growing global focus on such issues as they relate to investment management and corporate reporting responsibilities.
Positions on Environmental, Social, and Governance IntegrationRead the Full Statement (PDF)
Key points in the new Statement include the duty of CFA charterholders to factor in all material information, including material ESG factors into investment analysis, unless contrary to client wishes. The Statement notes that such factoring is consistent with an investment manager’s fiduciary duty.
The Statement also sets forth the Institute’s educational focus on ESG matters in the CFA curriculum and our support for higher-quality, more consistent reporting of ESG factors by publicly listed companies. It also addresses the growing concern about managers and products that are loosely marketed as ESG strategies to investors. The Statement supports the development of a proper taxonomy that requires full disclosure and validation of the ESG strategy claims.
Finally, the Statement recognizes that not all investment strategies and managers employ active, fundamental analysis. In the case of index products for example, the manager should alert the client as to the extent and how ESG factors are featured in these types of passive investment products.