CFA Institute
Climate Impact & Sustainability Data (2015)
Reporting Period: 2015
Environmental Metrics
ESG Focus Areas
- Environmental
- Social
- Governance
Climate Goals & Targets
Environmental Challenges
- Limited, unverified, and non-standardized ESG-related disclosure by companies.
- Difficulty in assigning monetary value to ESG issues and integrating them into quantitative models.
- ESG issues tend to influence financial performance in the long term, while many investors have short-term horizons.
- Short-termism in investing.
- Externalities linked to ESG issues (e.g., climate change).
- Regional differences in the consideration of ESG issues.
Mitigation Strategies
- Promoting ESG integration into investment analysis.
- Advocating for improved ESG disclosure and independent verification.
- Highlighting the long-term financial implications of ESG factors.
- Encouraging active ownership and engagement with companies on ESG issues.
- Developing educational resources and training programs on ESG considerations.
- Exploring innovations in impact investing (e.g., green bonds, social impact bonds).
Supply Chain Management
Climate-Related Risks & Opportunities
Physical Risks
- Climate change impacts
Transition Risks
- Climate change regulations and policies
Opportunities
- Investments in renewable energy and other sustainable technologies
Reporting Standards
Frameworks Used: UN Global Compact, Principles for Responsible Investment (PRI), Equator Principles, OECD Guidelines for Multinational Enterprises, International Labor Organization Declaration on Fundamental Principles and Rights at Work, SA 8000, ISO 26000