Study of the CFA Institute on the influence of ESG disclosures on investment decisions

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18 Aug, 2015

The CFA Institute, a global association of investment professionals, has published 'ESG Issues in Investing: Investors Debunk the Myths'. The study shows that almost three-quarters of investment professionals worldwide take environmental, social, and corporate governance (ESG) issues into consideration in the investment process.

The report presents the results of an online survey that was conducted from 26 May to 5 June 2015. Some 1,325 members of CFA Institute who are portfolio managers or research analysts responded to the survey for a response rate of 3 percent.

Key findings of the survey are:

  • 63% percent of survey respondents said they consider ESG information in the investment decision making process to help manage investment risks, 44% include ESG evaluation on demand of their clients/investors, and 38% see ESG performance as a proxy for management quality.
  • Board accountability, human capital, and executive compensation were cited as the issues most important to investment analysis and decision-making.
  • In the Asia-Pacific region, ESG issues are considered by 78% of the respondents; investors in the Europe, Middle East, and Africa (EMEA) region follow with 74%; in the Americas region still more than half (59%) consider ESG factors.
  • 57% of respondents integrate ESG into the whole investment analysis and decision-making process; 38% use best-in-class positive alignment. 36% use ESG analysis for exclusionary screening.  
  • 61% of survey respondents say that public companies should be required to report at least annually on ESG factors, and 69% of these believe that these disclosures should be subject to independent verification.

Please click to access the full report on the CFA Institute's website. A webinar reviewing the findings is archived on YouTube.

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