CFA Institute, a global association of investment professionals, the Global Sustainable Investment Alliance and PRI have come together in a partnership.
These institutions have collaborated to issue a unified resource aimed at enhancing clarity and uniformity to the terms used in responsible investment. The motivation behind this initiative stems from regulators’ requests for voluntary standard setters to establish shared terminologies and definitions, ensuring global consistency in the asset and wealth management sectors.
CFA Institute is a leading global association of investment professionals, setting the standard for professional excellence in the industry. GSIA, on the other hand, stands as a coalition that champions sustainable investment worldwide. Meanwhile, PRI acts as an international conglomerate of investors, striving to incorporate sustainable practices into investments.
Their collaborative work focuses on clarifying key investment terminologies such as screening, ESG integration, thematic investing, stewardship, and impact investing. Each term has been meticulously defined, accompanied by a comprehensive explanation, a roster of primary definitions, and guidelines for practical usage. This document caters to a broad audience, including investors, regulators, policymakers, and other market stakeholders.
The alliance’s concerted efforts in standardising these terminologies aim to counteract greenwashing and enhance the comprehension of responsible investment nuances. Furthermore, they endeavour to dispel any misconceptions regarding different investment strategies. The revised terminologies encapsulated in this resource acknowledge the evolving landscape of responsible investment, recognising that these strategies can encompass an array of investment types and asset categories, covering both public and private sectors.
CFA Institute President and CEO Marg Franklin said, “Technical terminology is an important part of professional practice. New terms are always emerging alongside new ideas, and definitions evolve over time. It’s important to standardise terms and definitions as practices mature so that professionals can communicate efficiently and effectively with each other as well as with clients, regulators, and other market participants. We believe this work will serve as a valuable resource for CFA charterholders, members, and candidates.”
Former Chair of the GSIA Simon O’Connor remarked, “For many years, our organisations have been working to define and clarify the language of responsible investment. This foundation of experience and expertise enabled us to come together with a common purpose to clarify and harmonise these definitions on a global scale. We now encourage the investment industry and regulators to adopt these definitions to create greater consistency.”
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