Members of the Integrated Reporting, Corporate Reporting Dialogue include, among others: Financial Accounting Standards Board (FASB), Global Reporting Initiative (GRI), International Financial Reporting Standards (IFRS), and Climate Disclosure Standards Board (CDSB). “The overall goal is to improve the efficiency and effectiveness of corporate reporting by getting the participants to work together as much as possible," says Ian Mackintosh, Chair, Corporate Reporting Dialogue.
Investment Markets And Education
This writer is one among those who believe that the sustainability finance movement in Europe is three to five years ahead of the United States in the development of ESG standards through industry collaboration and integration of these issues. The CFA Institute 2017 ESG Survey confirms that 62 percent of respondents in European markets systematically consider ESG issues within their investment analysis, versus 48 percent in Asian markets and 47 percent in American markets.
Any increase in consideration of ESG issues in the United States will largely depend on the role that the markets play going forward, as well as the extent to which institutional investors and the various intermediaries participate and continually make the case that there is portfolio alpha as well as other benefits in the incorporation of ESG data.
“Education is critical,” says Papa, “and that’s where CFA Institute plays a key role in raising investor awareness and ensuring they’ve got the tools and the skill sets required to process and apply the information. CFA Institute’s CFA Program Course of Study includes a module on ESG investing as part of the Portfolio Management and Wealth Planning curriculum. To the extent that these correlating forces are effectively at play, I’d say it’s probable that the U.S. will keep making progress, as has been the case in the last few years. “
Adam Bernstein is the ESG and impact analyst at Gitterman Wealth Management, which offers SMART Investing portfolios to clients and other RIA practices. He is enrolled in the CFA credentialing program and I spoke to him at CFA Institute's recent ESG conference in New York.
"I'm an early career millennial taking the long-term view of the investment industry. Many jobs that exist today will be materially different even five years from now," he says, "because of disruptive technologies in this and other industries. Training and education in how to incorporate material, non-financial data into the diligence process is necessary to keep pace with my peers and the investment landscape, as well as be a fiduciary for my clients."
Paul Ellis founded Paul Ellis Consulting to work with financial advisors who want to integrate sustainable and impact investment strategies for their clients.