CFA Institute, GSIA and PRI announce harmonised definitions

CFA Institute, GSIA and PRI announce harmonised definitions

ESG-investing Impact investing ESG
Duurzaamheidsdata Sustainability data (Geralt, Pixabay)

CFA Institute, GSIA and PRI have outlined detailed definitions for screening, ESG integration, thematic investing, stewardship and impact investing.

Principles for Responsible Investment (PRI) announced that the Global Sustainable Investment Alliance (GSIA), CFA Institute, and itself have issued a new resource that aims to bring greater understanding and consistency to terminology used in responsible investment. The three organisations emphasise that this resource clarifies and harmonises existing terms and definitions, specifically:

  • screening
  • ESG integration
  • thematic investing
  • stewardship
  • impact investing

‘For each term, CFA Institute, GSIA, and PRI have outlined a definition, detailed explanation, a list of definitions that served as the primary inputs, and guidance for using the terms in practice. The paper is intended for investors, regulators, policymakers, and other market participants.

The collaboration was inspired by calls from regulators for voluntary standard setters to develop common terms and definitions to ensure consistency throughout the global asset management and wealth management industries.’

Against greenwashing

‘Promoting the consistent and precise use of terminology contributes to efforts to address greenwashing,’ PRI says. ‘The work to harmonise terminology also serves to deepen understanding of the nuances of responsible investment approaches. It counters confusion about what different responsible investment strategies seek to achieve by clearly differentiating the objectives of approaches, such as ESG integration and impact investing.

The harmonised terminology contained in the joint resource responds to shifts that have taken place in the responsible investment landscape. Prior versions of the definitions were, in some cases, specific to investments in listed companies. These updated definitions reflect the reality that responsible investment approaches can be applied to a wide range of investment styles and asset classes, spanning both public and private markets.’

The pdf-report can be downloaded from all three organizations: CFA, GSIA, PRI.