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Benchmarksclosed Nifty17,660.15-46.70 FEATURED FUNDS ★★★★★ Axis Midcap Fund-Growth 5Y Return 13.46 % Invest Now FEATURED FUNDS ★★★★★ Axis Nifty 50 Index Fund Regular - Growth 1Y Return 2.8 % Invest Now Search for Tata Consultancy| English EditionEnglish Editionहिन्दीગુજરાતીमराठीবাংলাಕನ್ನಡമലയാളംதமிழ்తెలుగు | Today's Paper Sign In Special Offer on ETPrime Home ETPrime Markets News Industry Rise Politics Wealth Mutual Funds Tech Careers Opinion NRI Panache ET NOW More Stocks News Live Blog Earnings Podcast Market Classroom Dons of Dalal Street Recos Stock Reports Plus Candlestick Screener Stock Screener Stock Watch Market Calendar Stock Price Quotes IPOs/FPOs Web Stories Markets Data Mind Over Money Cryptocurrency Crypto Influencers Crypto Podcast Crypto Meet Crypto TV Crypto Q & A Expert Speak Commodities ViewsNews OthersMentha OilPrecious MetalsGold MGoldSilverGold PetalSilver MicroSilver MGold Guinea Oil & EnergyNatural GasCrude OilCrude Oil MiniBase MetalsAluminiumZinc MiniLead MiniCopperZincNickelAluminium MiniLeadPlantationKapasCotton Candy Forex Forex News Currency Converter Live Stream! Technicals Technical Chart Visualize Screener More Expert ViewsMarket MogulsBondsStock GameChartMantra Technicals Trading GameWebinarsSitemapDefinitions Business News›Markets›Stocks›News›Why ESG disclosures for investment products need a holistic approach THE ECONOMIC TIMES DAILY NEWSPAPER IS AVAILABLE ONLINE NOW. Read Today's Paper WHY ESG DISCLOSURES FOR INVESTMENT PRODUCTS NEED A HOLISTIC APPROACH SECTIONS Why ESG disclosures for investment products need a holistic approach By Margaret Franklin, ET CONTRIBUTORSLast Updated: Feb 21, 2023, 03:27 PM IST Synopsis AS PART OF SFDR, FUNDS ARE CLASSIFIED INTO ARTICLES 6, 8, OR 9, DEPENDING ON THEIR CHARACTERISTICS AND THEIR LEVEL OF SUSTAINABILITY. THE CFA INSTITUTE ESG DISCLOSURE STANDARDS, IN CONTRAST, DO NOT AIM TO ACHIEVE POLICY OBJECTIVES, OR LABEL ESG PRODUCTS, BUT FOCUS ON ACHIEVING PRODUCT TRANSPARENCY. iStock Environmental, social, and governance (ESG) factors are increasingly recognized as integral components of investment analysis. While there is an array of choices available when it comes to the metrics used to evaluate these factors, investors usually apply different analytical approaches and data sources to address their ESG considerations. Owing to the growing stakeholder capitalism movement and its focus on the long-term impact of companies on society, sustainable investments have grown rapidly, and are estimated to be around 2.5 trillion US dollars globally.1 At CoP26 held in Glasgow in 2021, India made ambitious commitments to combat climate change, which will require several billion dollars of investments. At the same time, Indian asset managers are recognizing the long-term benefits of investing in ESG-oriented mutual fund assets. ESG-oriented mutual fund assets in India increased from 336 million US dollars to 1.5 billion US dollars between 2020 and December 2021, according to the Association of Mutual Funds in India.3 Global Standard in ESG Disclosures CFA Institute believes in fair representation and full disclosure of environmental, social, and governance issues for investment products. In 2021, we launched the global voluntary standards for disclosing how investment products consider ESG issues in objectives, investment strategy, and stewardship. Given that ESG considerations within the financial analysis and investment decisions arena are subject to the investment style and approach of the fund manager, a lack of clear, standardized disclosures not only results in confusion among investors and advisors, but can also lead to concerns about greenwashing. The Standards are designed to address this and include 10 fundamental requirements relating to how managers need to prepare disclosures and make them available to investors. Robust Standard-setting Process and Feedback from Global Stakeholders During the development process of the Standards, we received comment letters from global asset management firms and other key stakeholders that helped us refine our approach. One area where the feedback influenced changes was in categorization and labeling. We realized there currently is no agreement on these features, or how managers think about these strategies. In addition, regulators were framing rules for different labels and terminologies. Therefore, in our final version of the Standards, we included a section on terminologies, which provides recommendations, but not requirements. Most of the investment firms appreciate our open architecture and the flexibility to frame disclosures, and the guidance we provide to help them with the process. The CFA Institute ESG Disclosure Standards are carefully designed to complement existing regulations. For example, the European Union’s Sustainable Finance Disclosure Regulations (SFDR) are designed to classify funds for sustainable investment products by asking if the product has a sustainable investment objective, what strategy the product pursues, and whether the product considers adverse impacts. These high-level questions are addressed by specific sections in the standard. As part of SFDR, funds are classified into articles 6, 8, or 9, depending on their characteristics and their level of sustainability. The CFA Institute ESG Disclosure Standards, in contrast, do not aim to achieve policy objectives, or label ESG products, but focus on achieving product transparency. SEBI’s ESG Disclosure Rules for ESG Mutual Funds In India, the Securities and Exchange Board of India (SEBI) made remarkable efforts to streamline disclosures and processes for companies, fund managers, and other intermediaries to improve market integrity. Following the mandate by the Securities and Exchange Board of India around Business Responsibility & Sustainability Reporting (BRSR), as many as 180 Indian companies have issued voluntary disclosures this year. SEBI’s disclosures for ESG mutual fund schemes cover both firm and investment product level disclosures, and general obligations of the asset management company with respect to sustainable investments. The CFA Institute Standards complement SEBI’s disclosure rules. We published a guidance document accompanying our Standards to help fund managers comply with the disclosure rules for various investment approaches, ranging from negative / positive screening, ESG integration, and impact investing. In addition, the Standards provide additional disclosure criteria which investors will find useful. For example, for an impact investment objective, our Standards require managers to disclose the stakeholders who are expected to benefit, discuss any trade-offs between impact and financial objectives, and explain how the impact objectives contribute to Sustainable Development Goals (SDGs), if stated. Along with the Right Regulations, Education is Key As demand for sustainable investing grows, regulation that enables the sustainable investment market to develop in an orderly fashion is important. But bridging the skills gap is also a key part of the equation. Our 2020 review of 10,000+ LinkedIn investment professional job posts found that approximately 6% mentioned sustainability-related skills, and the demand for sustainability talent is rated as “very high.” However, our analysis of 1 million investment professionals on LinkedIn found that <1% listed sustainability-related skills. We expect educational offerings from credible global providers such as CFA Institute will continue to play a key role in training a new generation of investment professionals who can not only incorporate ESG factors in their investment analysis, but also help retail investors select the right products that align with their investment goals and values. Conclusion When we first described a scenario of Purposeful Capitalism in 2017 as part of our Future State of the Investment Profession report, some observers dismissed it as too aspirational, although we have seen this idea gain traction in the years since and now society is expecting more from all companies, including those in the investment industry. These expectations require that organizations communicate their investment goals and strategies clearly to all stakeholders and are forthright about the risks and benefits associated with ESG investing. CFA Institute Disclosure Standards enables investment managers to provide greater transparency and much needed clarity to the marketplace. [The author is CFA (President and CEO, CFA Institute)] (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times) Don’t miss out on ET Prime stories! Get your daily dose of business updates on WhatsApp. click here! (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.) READ MORE NEWS ON esgenvironmentalsocialgovernancemutual fundmfcop26 (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds.) Download The Economic Times News App to get Daily Market Updates & Live Business News. ...moreless TOP MUTUAL FUNDS * Equity * Tax Saver * Debt * Hybrid * Others * Featured Return Duration:Select Duration1M3M6M1Y3Y5YMax LARGE CAP * FEATURED Axis Nifty 100 Index Fund Regular - Growth ★★★★★ 3Y RETURN22.56% FUND SIZE952.94 Crs Category Returns +15.78%+38.53% Invest Now * FEATURED Axis Nifty 50 Index Fund Regular - Growth ★★★★★ 3Y RETURNN.A. 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Read all scheme related documents carefully. * INDIAN INDICES AS ON 04:04 PM | 17 APR 2023 * Nifty Bank42,262.55 11 Advance1 Decline 130.00 (0.31%) Nifty Next 5038,663.50 37 Advance13 Decline 166.75 (0.43%) Nifty Midcap 10031,006.50 61 Advance39 Decline 121.85 (0.39%) Nifty 5017,706.85 31 Advance19 Decline -121.15 (-0.68%) SENSEX59,910.75 16 Advance14 Decline -520.25 (-0.86%) View All Gainers >> MARKET DASHBOARD NSE BSE * Top Gainers * Top Losers * Nestle India20,244.4003:59 PM | 17 Apr 2023779.05 (4.00%) Power Grid236.6503:59 PM | 17 Apr 20235.45 (2.36%) SBI544.0003:59 PM | 17 Apr 202311.05 (2.07%) Coal India Ltd229.6003:58 PM | 17 Apr 20234.10 (1.82%) View All Top Gainers ›› * Infosys1,258.3004:00 PM | 17 Apr 2023-130.90 (-9.42%) Tech Mahindra1,029.9503:59 PM | 17 Apr 2023-56.90 (-5.24%) HCL Tech1,042.2003:58 PM | 17 Apr 2023-29.65 (-2.77%) NTPC169.6003:59 PM | 17 Apr 2023-3.45 (-1.99%) View All Top Losers ›› * View All Top Gainers ›› * View All Top Losers ›› Discover Mutual Funds * All Mutual Funds Top Tax Saving Mutual Funds Better Than Fixed Deposits Low Cost High Return Funds * Best Hybrid Funds Best Large Cap Funds SIP’s starting Rs. 500 Top Performing Mid Caps * Promising Multi Cap Funds Top Rated Funds Top Performing Index Funds * 1 * 2 * 3 Trending in Markets * HDFC Bank Share PriceWhy is Sensex Falling Today?Options TradingInfosys Share Price * Gold PricesNifty UpdateAvalon Technologies IPOBitcoin Price Today * Stock Market Holiday TodayIt SectorInfosys Q4 Results LiveQ4 Results * Stocks to buyQ4 EarningsChatgptNew tax Regime * Stock Market Holidays 2023CryptocurrencyStock ScreenerStock Market * IPOGold RateTop GainersRupee vs Dollar * Share MarketSilver PriceNifty 50Nifty Bank * Infosys Share PriceCrude Oil Price * Growth at Reasonable Price TCS3139.50-1.55% Infosys1258.30-9.42% HCL Tech1042.20-2.77% Wipro361.35-1.89% * High Dividend Yield HPCL226.900.84% Cosmo Films611.80-1.19% Heidelberg Cement168.90-0.59% Swaraj Engines1548.70-0.39% * Mid-cap Growth Stocks Sonata Software799.80-5.76% Rail Vikas Nigam73.10-0.61% Coforge3891.90-3.40% Caplin Point620.25-1.30% * Attractive Bluechips Vedanta 279.001.20% NMDC111.450.13% SAIL82.300.92% Indus Towers137.10-0.22% * Value Stocks NMDC111.450.13% Sun TV422.55-1.51% Bhansali Engg103.95-0.53% GNFC544.80-0.20% * 1 * 2 * 3 * 4 * 5 Why follow tips? 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