CFA Institute Releases ESG Disclosure Standards Draft for Investment Products

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  • CFA Institute Releases ESG Disclosure Standards Draft for Investment Products

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    CFA Institute published the first draft of its voluntary industry standard, namely the ESG Disclosure Standards for Investment Products, for feedback on the proposed principles, requirements, and recommendations, according to its own website on May 19. The Standards aim at clarity and efficiency in identifying, comparing, and presenting investment products with ESG-related features via transparent and consistent information disclosures. CFA Institute stated that the Standards would be the first worldwide standards for ESG disclosures on product-level and applicable for all kinds of investment instruments, assets, ESG strategies, and markets. The institute was scheduled to release the final version of the Standards in November 2021.

    As ESG factors play an increasingly important role in assessing credit and market risks, investors are looking for more meaningful information and highlighting the consistency of ESG disclosure standards. However, there are many existing voluntary frameworks or standards for ESG disclosure, some of which overlap and are not directly comparable, indicated by experts in ESG disclosure. A globally accepted ESG disclosure standard would enable investors to understand and compare inter-company ESG reports more efficiently. Since 2020, several ESG related standard setters have made progress in harmonizing ESG disclosure standards. Last September, CDP, CDSB, IIRC, GRI, and SASB announced a shared vision of collaborating on comprehensive corporate reporting. In the same month, IFRS Foundation launched a consultation paper to assess demand for global ESG standards, while IBC published a set of universal metrics and disclosures for reporting on ESG performances, which is referred to as the Stakeholder Capitalism Metrics.

    Sources:

    https://cdn.ifrs.org/content/dam/ifrs/project/sustainability-reporting/consultation-paper-on-sustainability-reporting.pdf

    https://impactmanagementproject.com/structured-network/statement-of-intent-to-work-together-towards-comprehensive-corporate-reporting/

    https://www.globalelr.com/2020/10/the-ifrs-foundation-launches-consultation-on-sustainability-reporting/

    https://www.lexology.com/library/detail.aspx?g=4c9a61f2-2a7e-4d7f-8aa3-0f192f4e196c

    https://www.lexology.com/library/detail.aspx?g=4c9a61f2-2a7e-4d7f-8aa3-0f192f4e196c

    https://www.weforum.org/reports/measuring-stakeholder-capitalism-towards-common-metrics-and-consistent-reporting-of-sustainable-value-creation

    https://www.lexology.com/library/detail.aspx?g=d432b3e1-3e44-4212-9d9a-93c19595ad8c

    https://www.cfainstitute.org/-/media/documents/support/ethics/exposure-draft-cfa-institute-esg-disclosure-standards-for-investment-products.ashx

    https://www.cfainstitute.org/about/press-releases/2021/cfa-institute-publishes-exposure-draft-of-esg-disclosure-standards-for-investment-products

    https://www.cfainstitute.org/en/ethics-standards/codes/esg-standards

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