The CFA Institute wants industry input on its new standard for environmental, social and governance disclosures by money managers.
The organization is working on a voluntary global ESG disclosure standard for investment strategies, with plans to release an initial version in May.
The standard will focus on disclosure requirements for strategies with ESG-related features, enabling investors to evaluate whether the fund meets their needs, the CFA Institute said.
A consultation paper published Wednesday was written with input from a working group of 15 international volunteers with expertise in ESG, asset owners, money managers, consultants and service providers.
The paper proposes definitions of six ESG-related features of investment strategies. The aim is that these features form the basis of the standards by connecting investor needs and disclosure requirements.
Among the definitions are ESG integration — that a strategy explicitly considers ESG-related factors that are material to the risk and return of the investment alongside traditional financial factors — and "impact objective," in which a strategy seeks to generate a positive, measurable social or environmental impact alongside a financial return. The other definitions cover ESG-related exclusions, best-in-class, ESG-related thematic focus and proxy voting, engagement and stewardship.
"We know from experience that it is vital to have diverse perspectives in the formulation of global standards," said Chris Fidler, senior director, global industry standards, in the news release. "We are seeking input from individuals, groups and organizations around the world in the form of comment letters, as well as individuals to participate in volunteer committees."
Comments are due by Oct. 19.
The CFA Institute also wants volunteers to support the next stage of the development of the standard. It is forming two groups, an ESG technical committee and an ESG verification subcommittee, according to a spokeswoman. Further information on the volunteer opportunities is available on the CFA Institute website.
The CFA Institute has already produced the Global Investment Performance Standards — industry best practice guidelines on investment performance reporting and presentation, and the Asset Manager Code, a code of conduct to help money managers put their clients first.