CFA consults on ESG disclosure standards

Sets out general principles for investment disclosure

CFA Institute is asking for feedback on a proposal for a new set of ESG disclosure standards.

Last year, the CFA opened a opened a consultation with investment professionals for their views on new standards and has come up with the Exposure Draft, which sets out its general principles for investment disclosure, namely that all disclosures are complete, reliable, consistent, accessible, clear and concise. It also sets out its compliance requirements and general requirements, such as that an investment product’s presentation must include the name of the investment manager that manages it.

It highlights where to source ESG information, how to analyse it, portfolio-level ESG criteria and characteristics, the process of achieving impact objectives and its stewardship requirements.

See also: – CFA Institute rolls out global ESG certificate

CFA Institute said the standards will be sufficiently different from other disclosures and regulation such as the Sustainable Financial Disclosure Regulation, and provides questions to aid feedback. It hopes investment managers can apply the standards regardless of how their investment products are named, labelled, or categorised, and will have the flexibility to apply them on a product-by-product basis rather than to all products, or at the firm level.

“ESG standards are another step towards ensuring transparency and safeguarding trust in our industry,” said Margaret Franklin (pictured), CFA president and CEO of CFA Institute. “The pandemic has galvanized both interest and real action in ESG investing, and there is widespread support for standards that will bring greater clarity and efficiency to the identification, comparison and presentation of products with ESG-related features. These will be the primary benefits for all users of the standards.”

Paul Andrews, managing director of research, advocacy and standards at CFA Institute, added: “What sets the standards apart from others is that they are suitable for all types of investment vehicles, all asset classes, all ESG strategies, and all markets. They harmonise many of the product-level ESG disclosure requirements found in existing regulations and other more narrowly focused voluntary standards, as well as address gaps where no standards exist.  The Standards will become the first global standards for product-level ESG disclosures.”

The Exposure Draft was written in conjunction with an 18-strong ESG technical committee, as well as asset owners, asset managers, consultants or service providers. It incorporates the public comments received on the Consultation Paper that was released in August 2020 and the CFA Institute plans to release the final version of the ESG Disclosure Standards for Investment Products in November 2021.

Comments on the Exposure Draft must be submitted to or by using the form on the website by 14 July 2021.


Natasha Turner

Natasha is global editor at ESG Clarity, part of Mark Allen Financial, and has been a financial journalist for seven years. She has been shortlisted for Story of the Year and Investment Journalist of the...