Environmental, Social, and Governance Issues
Analysis of environmental, social and governance (ESG) issues is an important part of the investment process. CFA Institute encourages all investment professionals to consider material ESG factors when making investment decisions. The Institute is also strongly focused on developing educational tools on ESG for its members and for the broader investment management industry. Below are the most notable ESG posts selected by the ARX Editorial Team.
Select "Research" in the main menu to find more ESG content in ARX's repository of more than 5,000 posts.
Understanding ESG Investing in Asia-Pacific Emerging Markets
In collaboration with CFA Societies in APAC, ARX organized a closed-door roundtable among industry practitioners to examine ESG investing in emerging markets. Key topics included latest trends, regulations, and technological innovations.
November 2022 | CFA Institute
WEBINAR: Modern Slavery Webinar Series - Tackling Modern Slavery through Investment Management
Presenting to you the Modern Slavery Webinar Series co-organized by CFA Societies Australia and Monash University! This second webinar focuses on how investors can identify and address exposure to modern slavery risks in portfolios.
10 November 2022 | CFA Societies Australia; Monash University; RIAA | Video: 59 mins.
Tripod for Scaling-up Climate Finance: NDC, NFV, and ESG
Korea submitted the reinforced NDC last year. The realized path so far has been above the target path. The Korean NFV was established this year. The presentation looks at the potential of streaming private ESG investment to public climate finance.
26 October 2022 | Ick Jin, PhD, CFA, CIPM
The Future of Electric Vehicles in Asia
Much attention is being paid to electric vehicles (EVs) in the green transition because the technology already exists to help governments reduce emissions at reasonable costs.
04 March 2022 | Alicia Garcia Herrero; HKUST Institute for Emerging Market Studies (IEMS)
Independent Directors in Pakistan - Regulations & Practice
This publication is prepared with respect to independent directors currently serving on boards of various companies in Pakistan. It mainly focuses on their role, responsibility, diversity, selection, remuneration, representation, and board terms.
25 October 2022 | Mohammad Shoaib, CFA; Shahzad Saleem, CFA; CFA Society Pakistan; The Pakistan Credit Rating Agency
Using Indices to Help Align ESG Goals and Values
Take a closer look at the importance of index construction and underlying data across the ESG spectrum with S&P DJI’s Ben Leale-Green.
24 August 2022 | S&P Dow Jones Indices
Green Equity Exposure in a 1.5°C Scenario
Produced in collaboration with the IIGCC, this paper will inform climate investment decision-making, building the green economy exposure of their equity portfolios and climate benchmarks in line with a 1.5°C temperature scenario.
28 September 2022 | Lily Dai; William Nicolle; Jaakko Kooroshy; Lee Clements; FTSE Russell
China Sustainable Funds 1H 2022 Review / 2022年上半年中国可持续基金表现回顾
China’s sustainable funds saw a decline in the total assets under management (AUM) in the first half of 2022, dropping 11% from the all-time record of RMB 227 billion at the end of 2021 to the current RMB 203 billion (roughly USD 30bn).
30 August 2022 | Fay Wu; Jiaye Pan; MioTech
A Framework for Assessing Natural Capital Risks and Opportunities in the Food Sector
This ESG in Depth examines the topic of natural capital and how it, along with the ecosystem services its provides, poses a material systematic risk and at the same time presents opportunities in several key sectors.
10 August 2022 | MFS Investment Management
ZSL releases new research on the timber and pulp industry
This year’s ZSL SPOTT assessments saw 100 timber & pulp producers, processors and traders assessed against 179 environmental, social and governance (ESG) indicators. See the results to find out the key sustainability issues across the sector.
03 Aug 2022 | Fergus Campbell, Zoological Society of London - ZSL SPOTT.
Navigating Social and Sustainability Bonds
This research paper aims to help investors and other market participants to better understand the development, trends, challenges and opportunities of the social and sustainability bond market.
20 July 2022 | Alan Meng, Lee Clements, Lily Chung, FTSE Russell
Dealing with income bias in sovereign ESG scores: Sovereign ESG revisited
Using a simple statistical framework and our proprietary Sovereign Risk Monitor (SRM) methodology, we estimate a log-linear relationship between the income level of economies and their respective E, S and G performance assessment.
12 July 2022 | Julien Moussavi, Lazar Karapandza, FTSE Russell
What Is Internal Carbon Pricing And How Can It Help Achieve Net-Zero Goal?
CDP published a report on ICP in collaboration with CPLC. The report looks at the importance of carbon pricing in allowing businesses to transition to more sustainable operations, with a key focus on emerging economies.
1 May 2022 | CDP, The Carbon Pricing Leadership Coalition
WEBINAR: ESG Talent Development Trends and Strategies
CFA Institute is proud to offer the Certificate in ESG Investing to help firms and individuals stay competitive, and to equip them with skills to better integrate ESG factors into their investment analysis and client conversations. This information session highlights the latest trends and opportunities in the ESG investment space, presents details of the curriculum of the Certificate in ESG Investing, and offers a discussion with industry leaders on how they are filling the ESG talent gap in their companies.
7 June 2022 | CFA Institute | Video: 1 hr 32 min.
#WhyESGMatters: The Handbook - 2nd Edition
Sourced from HSBC's global network of over 300 analysts, this handbook aims to help you broaden your knowledge of key areas of the increasingly important and fast moving world of ESG.
4 May 2022 | Wai-Shin Chan, HSBC Global Research
Rising to the Challenge: How Companies in Asia Pacific are Preparing for the Net-Zero Economy
CDP, in partnership with South Pole, analyses the climate disclosures of almost 4000 Asia Pacific companies. Despite increased commitment toward emissions reduction, there is a significant ambition gap in meeting the Paris Agreement goals.
31 March 2022 | CDP, South Pole
Mind the Gaps: Clarifying Corporate Carbon
The paper surveys the current state of corporate carbon disclosure, explores the challenges facing investors in using estimation strategies and introduces a new FTSE Russell carbon emission dataset for c. 10,000 companies.
17 May 2022 | FTSE Russell: John Simmons, Jaakko Kooroshy, Edmund Bourne, Mallika Jain, Lee Clements
Geothermal: Earth’s Natural Battery Power
We look at the scope, the technology, and industry players in the niche but important energy source on the path to net zero.
10 May 2022 | MioTech
Bringing ESG Considerations to Australian Strategies
The S&P/ASX 200 ESG Index draws on the intelligence of the S&P DJI ESG Scores, which robustly measure companies’ ESG risk and performance factors to measure the performance of securities from the benchmark index that meet sustainability criteria.
21 April 2022 | S&P Dow Jones Indices
The S&P PACT Indices: Leading the Net Zero Charge for Two Years
Two years is a long time in the sphere of ESG. While the world wrestled with the worst pandemic in a century, S&P Dow Jones Indices (S&P DJI) shook the ESG indexing space and cemented its position as a leader in climate indices.
20 April 2022 | S&P Dow Jones Indices
How Asset Owners Prioritize Action on Climate Change: 2021 Global Survey Findings from Asset Owners
This report examines how assets owners around the world are prioritizing positive action on climate change and how they are actively engaging as shareholders to encourage corporates to accelerate their own climate-focused initiatives.
6 May 2022 | FTSE Russell
On Greener Pastures: Global Sustainability Funds Development 2021-22
With global sustainability assets reaching US$2.74 trillion in 2021, how are investment pools developing and performing globally?
28 April 2022 | MioTech; Fay Wu
Blue Suits and Greenflation: Exploring ESG Integration
Our fixed income ESG analyst explains what "greenflation" is and discusses why ESG integration into an active fixed income investment process matters so much.
10 August 2022 | MFS Investment Management
WEBINAR: Modern Slavery - Legal and Regulatory Landscape
Watch the recorded webinar as it discusses the current state of modern slavery risks, the impact of the COVID-pandemic and the evolving legal and regulatory landscape in several key markets like Australia and Thailand.
27 April 2022 | CFA Institute, Monash University
Reframing Fund Managers’ Increasing Climate Compliance Requirements
Ideas to encourage the early and robust application of the likes of the SFC's revised FMCC - it's based on science, starts with identifying/assessing, and makes so much sense from the five perspectives included (and more!)
22 April 2022 | Red Links; Fiona Donnelly
Measuring Modern Slavery Statement Disclosure Quality
Do the largest ASX-listed companies fully understand and disclose their modern slavery risks in their operations and supply chains, as required by Australia's Modern Slavery Act (2018)? Disappointingly, more than a third of them don't.
19 April 2022 | Monash Centre for Financial Studies, Nga Pham, Bei Cui, Ummul Ruthbah
12 April 2022 | 金融市场研究; 王文，刘锦涛
Highlights of Panel Discussion on SRI Taxonomy
Part 5 of the SRI series focused on taxonomy of sustainable investing. The document comprises summarized views on topics like principles-based taxonomy, classification of environmental objectives, financing credit transitions and transition strategy.
8 April 2022 | CFA Society Malaysia
WEBINAR: APAC ESG Investment Strategy: Identifying APAC's ESG Trend-setters
Watch the recorded webinar on 2022 ESG trends to watch and trend-setters in the APAC region, with a zoom-in on climate change, biodiversity and supply chains.
7 April 2022 | CFA Institute, MSCI
Green or Brown: Which Overpriced Stock to Short Sell?
This research shows a negative relationship between firm’s ESG performance and short selling demand among overpriced stocks. Shorting overpriced stocks with high ESG scores exposes the trader to higher risk.
31 March 2022 | Weiming Zhang
Integrating ESG into Core Japanese Benchmarks
The FTSE Blossom Japan Index helps investors integrate ESG considerations and enhance ESG exposure, while maintaining the index characteristics of a broad market benchmark. It also provides a strong basis for corporate engagement.
31 March 2022 | Atsuhito Mori, FTSE Russell
氣候變化危機與ESG投資機遇 : 投資者教育講座
17 March 2022 | CFA Institute, CFA Society Hong Kong, IFEC
Gauging Opportunities from the Hydrogen Economy
The Fourth Industrial Revolution will be driven by renewable energy, and in the context of energy transition, hydrogen could play a vital role.
7 March 2022 | S&P Dow Jones Indices
Advent of ESG Ecosystem In India
In India, there is a growing recognition of the importance of ESG factors and their material impact on corporate sustainability. This recognition is coming from all the stakeholders of the markets.
1 March 2022 | Mohd Merajuddin Inamdar, Dr. (CA) Minaxi A Rachchh
Breaking Down Real Estate Net-Zero Targets
In this report, we outline an approach to evaluate real estate funds’ and companies’ decarbonization and net-zero commitments and targets. The goal is to help the wider industry set comprehensive, ambitious and feasible net-zero commitments.
10 March 2022 | MSCI: Antonios Panagiotopoulos, Bert Teuben
2022 ESG Trends to Watch / 2022 年 ESG 趋势展望
Over the last decade, ESG has gone from fringe to mainstream. Investors and companies have seen increased regulation, demands for transparency and a quest for standards. MSCI presents ten ESG trends to watch in 2022.
2022 年和未来十年会有哪些趋势？ 近年来，气候变化已经超越公司治理，成为最紧迫且备受投资者关注的环境、社会、公司治理（ESG）议题。与此同时，ESG 投资也已经真正成为主流的投资方式，(并持续受到监管机构的关注）。然而，未来十年，企业、投资者和我们所在的地球都将面临更多新的风险，考验我们能否从过去的经历中吸取教训。
10 March 2022 | MSCI: Linda-Eling Lee, Meggin Thwing Eastman
Sustainable Investments Insights: Quarterly Report - February 2022
Decarbonization and green-technology strategies suffered most from surging fossil-fuel prices and the resulting selloff in alternative energy stocks. Yield-curve steepening weighed on sustainable strategies that have large underweights in financials.
2 March 2022 | FTSE Russell
Sustainability in the Natural Rubber Supply Chain: Getting the Basics Right
Downstream companies and financial institutions hold the key to driving significant environmental and social changes in the natural rubber industry by committing to and applying sustainable practices and improving sourcing procedures.
21 January 2022 | Fabrice Inkonkoy, Zoological Society of London
Keynote and Fireside Chat: SDG Investing
Watch this pre-recorded CFA Institute Alpha Summit APAC presentation to learn about how to implement UNPRI Sustainable Development Goals in an investment framework.
10 February 2022 | CFA Institute
Panel Discussion: The Pandemic's Impact on Shareholder Activism
Watch this CFA Institute Alpha Summit on-demand video to learn about the changing landscape of shareholder activism in Asia Pacific.
10 February 2022 | CFA Institute
Panel Discussion: Global and Regional ESG Regulations and Standards: Implications for the Financial Services Industry
Watch this CFA Institute Alpha Summit on-demand video to learn how ESG regulations in Asia Pacific are impacting the financial industry.
10 February 2022 | CFA Institute
Panel Discussion: Climate Change Risk – Action for Industry Stakeholders
Watch this pre-recorded CFA Institute Alpha Summit APAC panel discussion to learn about the best practices of integrating climate risk into financial decision-making.
10 February 2022 | CFA Institute
Fireside Chat: Progress in Greening the Financial System: Lessons Learned and Looking Forward
Watch this pre-recorded video session of the 2022 CFA Institute Alpha Summit APAC to learn how financial firms in the region transition to the green economy.
10 February 2022 | CFA Institute
Impact of Debt Maturity and Financing Constraints on Corporate Investment
This study investigates how the maturity structure of a firm’s debt affects its investment decisions. Using data for Chinese firms, we find that debt maturity positively impacts investment, especially for firms that face higher financial constraints.
This paper was submitted for the CFA Institute ARX Best Paper Award at the 26th Annual New Zealand Finance Colloquium 2022.
25 January 2022 | Kuntal K. Das; Nicholas A. Ross
Moving From Risk to Resilience: Climate Change and the Forestry Sector
Lack of disclosures in forestry operations is a missed opportunity, creating data gaps or ‘blind spots’ for financiers and buyers who need to consider their exposure to climate risk.
1 November 2021 | Zoological Society of London, SPOTT initiative: Maggie FitzHerbert, Clara Melot
Tropical Timber: A Guide to Responsible Sourcing and Financing
This report from ZSL SPOTT provides an overview of ESG issues associated with unsustainable timber and pulp production. It provides financial institutions and buyers guidance on the role of certification, and on what they should be asking companies.
26 January 2021 | Zoological Society of London, SPOTT initiative
Financing Food Systems Decarbonisation: The Forgotten Sector
How financial institutions may support the transformation of the food system via allocating funds to innovative business models in mitigating carbon emissions, utilizing innovative financing model to fund climate-smart food production.
21 December 2021 | Asian Institute of Chartered Bankers: Adam Farhan, Fatin Zani
From Grass to Mass: An Index-Based Approach to Measuring Greenium in Green Bonds
Green bonds have historically exhibited a green premium—or "greenium"—meaning they have lower yields compared to non-green bonds with otherwise similar characteristics.
13 December 2021 | S&P Dow Jones Indices
InsuranceTalks: Exploring ESG Implementation in the Insurance Space
What obstacles is ESG adoption facing in the insurance space? What is changing and what further developments are needed to help make ESG more accessible in insurance?
8 November 2021 | S&P Dow Jones Indices
Bringing ESG Considerations to Equal-Weight Indices
Equal-weight indices can have many benefits, notably long-term outperformance—largely driven by exposures to small size and value, along with their associated risk premia—as well as reduced concentration in the largest names.
17 December 2021 | S&P Dow Jones Indices
“Do No Significant Harm” and “Minimum Safeguards” in Practice: Navigating the EU Taxonomy Regulation
This paper analyses the DNSH and MS requirements within the Climate Delegated Act, transforming them into sustainable investment data points and proposing data solutions to assess the EU taxonomy alignment of activities, companies and portfolios.
17 December 2021 | FTSE Russell: Lily Dai, Sarah Williams, Jaakko Kooroshy, Lee Clements
Sustainability in Fixed Income: Key Developments and Investment Considerations
This paper presents key developments in ESG investing and considerations for fixed income investors when integrating sustainability into the investment process.
17 December 2021 | MFS Investment Management: Pilar Gomez-Bravo, Mahesh Jayakumar
WEBINAR: Introducing the First Global Voluntary ESG Disclosure Standards
The purpose of the CFA Institute Global ESG Disclosure Standards for Investment Products is to facilitate fair representation and full disclosure of an investment product’s consideration of ESG issues in its objectives, investment process, or stewardship activities. When investment products’ ESG approaches are fairly represented and fully disclosed, investors, consultants, advisors, and distributors can better understand, evaluate, and compare investment products, and the potential for greenwashing diminishes.
15 December 2021 | CFA Institute | Video: 62 min.
WEBINAR: CFA Institute Certificate in ESG Investing
This info session highlights the latest trends and opportunities in the ESG investment space and demonstrates how the Certificate in ESG Investing provides investment professionals with the expertise and insights needed to integrate ESG factors into investment decisions, preparing you with skills to excel now and in the future.
7 December 2021 | CFA Institute | Video: 59 min.
Do Physical and Transition Climate Risks Translate Into Investment Risks?
As climate risk becomes better understood, interest in ESG investing grows. Jaspreet Duhra, Global Head of ESG Indices, and Muhammad Masood, Director of iShares Sustainable Investing, explore what’s driving heightened adoption of ESG strategies.
4 November 2021 | S&P Dow Jones Indices
An ESG Analysis of the COVID-19 Crisis
In this study, we ask whether ESG resilience is the key to a well-managed pandemic such as COVID-19. Using our in-house model, ESG Factor-IN, we make the link between ESG performance and the human casualties of the pandemic.
6 December 2021 | FTSE Russell: Julien Moussavi, Lazar Karapandza
Do Managers Walk the Talk on Environmental and Social Issues?
We train a deep-learning model on various corporate sustainability frameworks in order to construct a comprehensive Environmental and Social (E&S) dictionary that incorporates materiality, and examine whether firms walk their talk on E&S issues.
This paper was submitted for the Asia Pacific Research Exchange Award at the 2021 New Zealand Finance Meeting.
26 November 2021 | Sudheer Chava, Wendi Du, Baridhi Malakar
Towards Investor-Oriented Carbon Targets Data
This paper proposes a TCFD-aligned framework for standardising and improving the quality of corporate GHG emissions reduction targets, and recommends further alignment and wider publication of targets.
23 November 2021 | FTSE Russell: Jaakko Kooroshy, Felix Fouret, Charles Dodsworth, John Simmons
The COP26 Net Zero Atlas
Our first Net Zero Atlas surveys countries’ latest climate targets and mitigation strategies, and calculates the implied temperature rise (ITR) associated with individual national climate goals.
23 November 2021 | FTSE Russell: Nicolas Lancesseur, Colin Subtil, Camille Cros, Jaakko Kooroshy
Analyzing Active Fund Managers’ Commitment to ESG: Evidence from the United Nations Principles for Responsible Investment
The UN PRI is the largest global ESG initiative in the asset management industry. Do firms that become PRI signatories make significant changes in their funds to integrate ESG in their investment process?
22 November 2021 | Aaron Yoon, Soohun Kim
Incorporating ESG into US Equity Benchmarks
To incorporate ESG into a broad US market index, deviation was needed from the risk and return of the underlying benchmark. Find out in this paper how FTSE Russell’s ESG Target Exposure approach can become a substitute for the traditional benchmarks.
16 November 2021 | FTSE Russell: Tony Campos, Carolyn Eagle
Applying ESG Factors to Government Bond Indices
What is the best way to apply an ESG investment approach to a global sovereign debt portfolio? Discover in this report how the FTSE ESG WGBI approaches this by applying the factor tilting methodology of the FTSE Global Factor Index series.
15 November 2021 | FTSE Russell: Richard Davies, Lazar Karapandza, Julien Moussavi
Cross Border Carbon and Potential Carbon Border Taxes
This paper assesses carbon border adjustment issues for investors by exploring the growing trend towards carbon border tax scenarios; the implications for financial investment; and assets’ exposures to the risks and opportunities involved.
15 November 2021 | FTSE Russell: Guillaume Emin, Claire Hugo
About the Author(s)
Senior Director: Scott Lee
Project Specialist: Natalie Yiu
Coordinator: Christy Leung