CFA Institute draws up ESG industry standard

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Global association CFA Institute, has invited feedback on its draft ESG disclosure standards for investment products, in an effort to address inconsistency across the industry.

The proposed industry standard will focus on disclosure requirements for investment products with ESG-related features, with the aim to let investors more comprehensively evaluate whether a product will meet their needs.

CFA has said it is looking to define and classify ESG-related features and establish disclosure requirements and procedures for independent examination.


Current standards set disclosure requirements for corporate issuers, prescribe requirements for the labelling or rating of securities or investment products, or define best practice for a strategy or approach. 

Margaret Franklin, president and chief executive of CFA Institute said setting global ESG standards will ensure transparency, safeguard trust and help consumers make more informed decisions about ESG products. 

“With growing interest in ESG investing, support is widespread from the investment community for the development of a standard to reduce confusion and facilitate better alignment of investor objectives with investment products,” Ms Franklin said.

The consultation paper on the standards published by the institute on Tuesday, has defined ESG-related features as components or capabilities of investment products that can be combined in different ways to meet investor needs. 

It goes on to propose definitions for six ESG-related features, which are ESG integration, ESG-related exclusions, best in class, ESG-related thematic focus, impact objective and proxy voting, engagement and stewardship.

The consultation paper was written by a working group with ESG expertise, as well as experience as asset owners, managers, consultants and service providers.

The ESG disclosure standards will add to CFA Institute’s global investment performance standards and the asset manager code. The new standards are expected to be released in May next year.

CFA Societies Australia chief executive Lisa Carroll said the institute is working with the wider investment community across the Asia Pacific on the proposed standard. 

“The [investment community’s] input not only safeguards transparency and trust in the standard, but it ensures the ESG Disclosure Standards for Investment Products will achieve the credibility of CFA Institute’s other standards,” Ms Carroll said.


CFA Institute draws up ESG industry standard
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].


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