CFA Institute promotes transparency with new ESG standards

The global association of investment professionals, CFA Institute, has announced it is seeking feedback from the Australian investment community on its exposure draft of the global environmental, social and governance (ESG) disclosure standards for investment products aimed at increasing transparency. 

According to CFA’s president and chief executive, Margaret Franklin, the pandemic triggered both interest and real action in ESG investing, bringing investors’ attention to support for standards that will help identify, compare and present products with ESG-related features.  

“The standards will harmonise many of the product-level ESG disclosure requirements found in existing regulations and voluntary standards, and also address the gaps which currently exist. Lisa Carroll, chief executive of CFA Societies Australia, said. 

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“These standards will become the first global standards for product-level ESG disclosures and they are suitable for all types of investment vehicles, all asset classes, all ESG strategies, and all global markets.”  

The standards would contain disclosure requirements and recommendations that would address the following elements of an investment product’s strategy: 

  • Objectives; 
  • Benchmarks; 
  • Sources and types of ESG information; 
  • ESG exclusions; 
  • ESG Information in financial analysis and valuation; 
  • Portfolio-level ESG criteria and characteristics; 
  • Process to achieve impact objective; and 
  • Stewardship



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