A day before IOSCO published its final report setting out recommendations for regulators and policymakers on improving sustainability-related practices, policies, procedures and disclosures in the asset management industry, the CFA Institute has published its first voluntary Global ESG Disclosure Standards for Investment Products which have been designed to help ‘mitigate greenwashing’ and enable investors, consultants, advisors and distributors to better understand, evaluate and compare ESG investment products.
The standards, published on 1 November 2021, were developed following an industry-wide consultation to create standards that are based on the principles of fair representation and full disclosure of ESG issues within the objectives, investment process, and stewardship activities of investment products.
The standards apply to all types of investment vehicles, asset classes, and ESG approaches. They do not address corporate-level reporting or firm-level disclosures, naming, labelling or rating products, or the content of investment products’ periodic reports.
In the related press release, Paul Andrews, Managing Director for Research, Advocacy and Standards at the CFA Institute comments:
“Although there are differing regulations in global markets to address transparency for investors on ESG, it is critically important that there is a harmonised, global ESG approach for investor protection. Furthermore, such regulation does not always comprehensively cover all market participants. The standards fill these market needs on a global scale, facilitating important disclosures that will drive greater communication between the buyers of investment products and an industry marketing increasing numbers of funds and strategies that offer an ESG-centric approach.”
Additional materials to be released in early 2022 include a handbook with an explanation and interpretation of the standards, as well as assurance procedures and an optional standardised template that asset managers can use to prepare ESG disclosure statements.
The CFA will be holding a webinar on 15 November 2021, 12:00-13:00 ET to provide an overview of the Standards. Click here if you'd like to register.