Background
During the past several years, interest in investment products with ESG-related features has been particularly strong. A myriad of terms, approaches, and investment products has evolved to serve the varying needs of investors. However, many market participants are concerned that the inconsistency and variation in ESG-related disclosures, terminology, and investment approaches contributes to confusion and misunderstanding between investors and asset managers, which, in turn, may erode trust in the industry.
Setting professional and industry standards is integral to the mission of CFA Institute and the organization is regarded as an influential global standard setter. Indeed, the Global Investment Performance Standards (GIPS®) have been transformative in establishing transparency and comparability with respect to the calculation and presentation of investment performance. As of 30 June 2020, more than 1,800 organizations in 48 markets around the world had voluntarily adopted the GIPS® standards.
It is in this capacity that the organisation has committed to developing a voluntary, global industry standard to establish disclosure requirements for investment products with ESG-related features.
The purpose
The standard aims to provide greater product transparency and comparability to investors by enabling asset managers to clearly communicate the ESG-related features of their products. It will define and classify common ESG-related features and establish disclosure requirements for investment products with those features.
How your local society can help
A consultation paper aims to elicit feedback on the proposed scope, structure, and principles of the standard. We encourage you to notify your members of the consultation paper, and the associated response form, both of which will be available on 19 August after 10:30 am ET here.
Comment letters must be submitted to standards@cfainstitute.org by 19 October 2020. Any individual, group, or organization may submit a comment letter.
New volunteer opportunities
In addition, new ESG committees are forming to support the next steps of this important initiative. More information about and applications for these volunteer opportunities can be found here.
Applications will be accepted through 23 September 2020.
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