ESG Investing and Analysis
What Is ESG Investing?
ESG stands for Environmental, Social, and Governance. Investors are increasingly applying these non-financial factors as part of their analysis process to identify material risks and growth opportunities. ESG metrics are not commonly part of mandatory financial reporting, though companies are increasingly making disclosures in their annual report or in a standalone sustainability report. Numerous institutions, such as the Sustainable Accounting Standards Board (SASB), the Global Reporting Initiative (GRI) and CDP are working to form standards and define materiality to facilitate incorporation of these factors into the investment process.
CFA Institute Guide to ESG Investing for Investment Professionals
Environmental, Social, and Governance Issues in Investing
This guide to ESG investing takes fiduciary duty, externalities, disclosure, and other important ESG issues into account.
There is no one exhaustive list of ESG issues. ESG issues are often interlinked, and it can be challenging to classify an ESG issue as only an environmental, social, or governance issue, as the table below shows.
These ESG issues can often be measured (e.g., what is the employee turnover for a company?), but it can be difficult to assign them a monetary value (e.g., what is the cost of employee turnover for a company?).
Examples of ESG Issues
ESG vs. SRI
Why Is CFA Institute Focused on ESG?
More from CFA Institute on ESG Investing
ESG Investing Course & SRI Education
Start your ESG education with this introductory SRI and ESG investing course.
Handbook on Sustainable Investments
Stay informed about recent trends in ESG and sustainable investing with these practical examples for institutional asset owners.
Corporate Governance and ESG: CFA Program Refresher Reading
Exclusive to CFA Institute members, this CFA Program refresher reading gives an overview of ESG and corporate governance, its underlying principles and theories, and how these factors influence the investment decision-making process.
SRI Investing and Islamic Finance: Similarities and Differences
This report identifies the ESG and ethical considerations at the core of both SRI investing and Islamic finance by tracing the origins, historical connections and the main concepts in both approaches.
ESG Integration and Analysis in Europe, the Middle East, and Africa: Markets, Practices, and Data
This report outlines ESG integration best practices in EMEA markets.
ESG Integration and Analysis Integration in the Americas: Markets, Practices, and Data
This report outlines ESG integration best practices in the Americas markets.
ESG Integration and Analysis in Asia Pacific: Markets, Practices, and Data
Understand key ESG trends, drivers, and factors in ESG integration across APAC markets and investment practices.
ESG Integration Case Studies & the ESG Integration Framework
These case studies focus on integration in ESG fixed income, equities, and more.
ESG and Sustainability Reporting & Regulations
Learn more about how global ESG regulations and sustainability reporting have evolved, and how CFA Institute has responded to these changes.