Global collaboration between PRI and GSIA to develop ESG terminology

INSIGHT by the Responsible Investment Association of Australasia

A new global collaboration to align and refine ESG terminology between the UN Principles for Responsible Investment, the Global Sustainable Investment Alliance and the CFA Institute

The UN Principles for Responsible Investment, the Global Sustainable Investment Alliance and the CFA Institute have been working together over many years on joint programmes relating to ESG disclosure standards, definitions and understanding practices. They are acutely aware of the increasing pressure on their members and signatories to clearly present approaches to ESG investment so that beneficiaries, regulators and other stakeholders are able to understand ESG approaches taken in investment products and strategies. Our three organisations have recently formed a collaboration to work to refine, align, improve and harmonize their terms and definitions related to approaches to ESG investment.

The objective is to produce an authoritative resource that:

〉 Describes and explains approaches to ESG investment,

〉 Clarifies and harmonizes terminology associated with these ESG investment approaches (and/or explains differences), and:

〉 Provides guidelines for the usage of such terminology.

This public resource is intended to be used by the investment industry, regulators and policy makers with the objective of providing greater clarity and alignment in their usage in literature and across the industry. It is intended there will be a final paper covering a range of commonly used terms. The resource will be published in summer 2023 as working draft with the opportunity for comment before being finalised. It is intended to include provide essential concepts, a sample definition and guidance for usage. They will review terms such as ESG integration, screening and stewardship.

David Atkin CEO UN PRI ‘Increasing collaboration between global organisations such as the CFA, GSIA and PRI will be crucial in enabling our joint members and signatories to meet the evolving demands of regulators, stakeholders and asset owners’.

Simon O’Connor Chair Global Sustainable investment Alliance “This collaboration from three organisations with the broadest coverage of investment organisations and professionals across the globe will fill a crucial gap in the sustainable finance standards landscape. Now more than ever, it is critical that our industry falls in behind a clear and definitive set of standard definitions of responsible investment terminology and approaches. The absence of this clarity makes it harder for consumers to engage with responsible investment, and opens the door for greenwashing in our sector.”