The Principles for Responsible Investment (PRI) and CFA Institute today announced that they will collaborate on a global study on environmental, social and governance (ESG) investing in a move to determine how widely ESG issues are used by mainstream investors.
While ESG investing strategies have gained considerable ground over the last decade, many investors do not yet make it standard practice to look at ESG considerations across all of their asset classes. It is hoped that the collaboration between the PRI and CFA Institute will determine the depth of the remaining barriers to ESG integration, particularly on the part of investment managers.
Through a series of workshops covering North America, EMEA and Asia—scheduled to begin in October 2017 and running for several months in conjunction with CFA Institute meetings—the PRI and CFA Institute will gather information from groups of investors to identify best practices in ESG investing across each region. The research findings will culminate in a series of reports on each region, the first of which will be published in the summer of 2018.
During each workshop, a group of analysts and portfolio managers, drawn from the listed equities and fixed income spaces, will discuss best practices, the current state of ESG integration as well as the challenges of incorporating ESG data into the investment process. Workshop participants will be given a survey to complete about how they look at ESG integration. The survey will also be sent to the Sustainable Stock Exchanges (SSE) initiative, international development banks and other stakeholders, including the network of CFA Institute to obtain input from a number of different actors across the financial services sector.
“There is still a range of misperceptions about ESG factors and how they fit into existing financial models,” said Justin Sloggett, senior manager, Investment Practices at the PRI.
“Working with CFA Institute, we hope to gain better insights into how fund managers work and also address their concerns around ESG and returns.
“Though there are many good studies in the market, which show that looking at ESG considerations over the long term can enhance returns, this issue is still a stumbling block for many managers.”
“We look forward to working with this recognised leader on ESG matters,” said Paul Smith, president and CEO of CFA Institute.
“Our CFA Institute members and investors around the world are increasingly interested in getting answers to these important questions.”