On 19 May 2021, CFA Institute released an Exposure Draft of the ESG Disclosure Standards for Investment Products. The Standards establish disclosure requirements for investment products with ESG-related features. The purpose of the Standards is to provide greater transparency and consistency in ESG-related disclosures, resulting in clearer communication regarding the ESG-related features of investment products.
Development Process and Timeline
The release of the Exposure Draft is a significant milestone. The project is 80% complete and is now entering the final phase. The consultation period will close on 14 July and public comments will be used to shape the final draft, or “first edition,” of the Standards, which will be released by 1 November in time for COP26. CFA Institute staff will host a webinar about the Exposure Draft on 15 June at 1PM E.T.
Examination procedures are also in development. These procedures will be used by independent verifiers to test the disclosures that an investment manager makes for a particular investment product. These examination procedures will be released on 21 July for public comment.
We Want to Hear from the CFA Society Community
Sixteen societies submitted comment letters in response to the Consultation Paper that was released in August 2020. The quality of those letters was superb, and they were very helpful to the ESG Technical Committee. The goal of the Exposure Draft is to elicit feedback on the proposed principles, requirements, and recommendations within the Standards, and we want to hear from Societies again.
We encourage you to engage your members and participate in this important part of the standards setting process. Some of the questions in the Exposure Draft are directed specifically at investment professionals and include the following:
- Are the draft provisions helpful in establishing or clarifying the type of information that should be included in an investment product’s disclosures regarding the ESG-related aspects of the investment product’s strategy?
- Is there information that you would like to see disclosed in a compliant presentation that is not required by the draft provisions? Is there information required by the draft provisions that is not necessary?
- Would the Standards be helpful in maintaining a commitment to professional ethics and integrity?
The Exposure Draft and the associated response form can be found on the ESG Standards page on the CFA Institute website. Comment letters must be submitted to standards@cfainstitute.org by 14 July 2021. Any individual, group, or organization may submit a comment letter.
Register today to attend the 15 June webinar, and remember to submit your comment letters by the 14 July deadline!
Key Milestones and Deadlines
- 19 May 2021: Exposure Draft of the ESG Disclosure Standards for Investment Products released; consultation period opens
- 15 June 2021: Overview of the CFA Institute ESG Disclosure Standards for Investment Products Exposure Draft webinar
- 14 July 2021: Consultation period for Exposure Draft ends; comment letters due
- 21 July 2021: Examination Procedures released for public comment
- 1 November 2021: First edition of Standards to be released
Share Details with Your Society Members
We encourage you to notify your society members of the ESG Disclosure Standards for Investment Products Exposure Draft and the associated response form. Suggested LinkedIn and Twitter posts can be accessed here.
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