The guide – Environmental, Social and Governance Issues in Investments: A Guide for Investment Professionals – was developed by CFA Institute in response to the growing interest among investment managers in ESG issues.
CFA Society of Sydney president Anthony Serhan said, “Awareness of ESG issues in investing from energy efficiency to employee relations to bribery and corruption has grown substantially in the last decade".
“How these issues impact investment management is still not well understood and certain myths are common,” he said.
“The guide provides a clear explanation of ESG risks and opportunities, debunks common myths and helps investors better understand and evaluate social and environmental issues to make better decisions,” Mr Serhan said.
The guide explains the background and trends around ESG investing and also explains six common methods for applying ESG factors in portfolios, a statement issued by CFA Institute said. The report also explores the challenges currently facing the practice of considering ESG issues in investing.
“A key idea in the discussion is that systematically considering ESG issues will likely lead to more complete investment analyses and better-informed investment decisions,” the statement said.
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