Environmental, Social, and Governance in Investing
A critical factor in the financial performance of investments is the investor’s ability to identify drivers of the expected risk and return of investments. Financial analysts and portfolio managers are expected to be familiar with the financial factors that drive the value of an investment. However, issues that are difficult to measure in monetary terms and that do not form part of traditional financial metrics also affect the risk and return of investments—at times, decisively. In general, they are referred to as environmental, social,
and governance (ESG) issues.
Objectives
- serve as a primer for investment professionals on ESG considerations in investments across asset classes,
- inform the reader of the state of the discussion and practices regarding ESG considerations in investments,
- share the views of CFA Institute members regarding ESG considerations in investment