See also “Fiduciary Duty in the 21st Century” UNPRI Report.
The CFA Institute has joined a growing chorus of voices calling for environmental, social and governance (ESG) issues to be considered by fiduciaries. Why? Because, they say, incorporating ESG issues will likely lead to more complete investment analysis and better-informed investment decisions. In this piece, the group dispels the notion that ESG investing is only about excluding certain investments from a portfolio. They methodically examine the various other ways ESG factors can be incorporated into financial analysis. The CFA Institute is an influential global association of investment professionals and so it is groundbreaking for the group to address head on one of the thorniest issues in the ESG investing debate, that of fiduciary responsibility, going as far as to say that failing to consider these issues is a failure of fiduciary duty. In doing so, they remove an important barrier to investors integrating ESG issues into their investment process.