With the growing awareness of climate change risks, climate investing has become an important topic in the financial industry. The CFA Institute, as a leading global association of investment professionals, has an important role to play in promoting climate investing. In recent years, CFA has launched various initiatives to integrate climate considerations into investment analysis and decision making, aiming to steer more capital towards sustainable companies and projects. This article provides an overview of CFA’s efforts regarding climate investing.
CFA’s climate investing education programs equip investment professionals
CFA Institute offers a range of educational programs focusing on climate investing for its members and other investment professionals. The Certificate in ESG Investing covers climate change risks and opportunities across the investment value chain. The Climate Change Analysis in the Investment Process module provides in-depth knowledge on assessing physical and transition climate risks. These programs equip participants with expertise in areas like carbon footprinting, scenario analysis, and modeling climate impacts.
CFA’s codes and standards integrate climate factors
CFA Institute has incorporated climate considerations into its codes and standards like the Asset Manager Code of Professional Conduct and the Global Investment Performance Standards (GIPS). These codes require investment firms to consider material climate factors in their strategies, risk management, and disclosures. By integrating climate risks into prevailing industry standards, CFA is promoting climate risk management as a norm.
CFA raises awareness through climate investing events and research
Besides education, CFA Institute also strives to highlight the importance of climate investing through hosting conferences, seminars, and webinars on this theme. For instance, its climate investing conference in 2021 brought together policymakers, investors, issuers, and other stakeholders to exchange insights. Additionally, CFA publishes many reports and case studies to showcase best practices in climate analysis, reporting, and investing strategies. These initiatives spread awareness of climate risks and advance the uptake of climate investing.
CFA advocates for supportive policy frameworks for climate investing
Policy and regulatory environments play a crucial role in steering investments towards climate-friendly areas. CFA engages with regulators worldwide to advocate for policies like carbon pricing, climate risk disclosure rules, and green taxonomy to direct more capital flows into sustainable assets. It also backs global frameworks like the TCFD to standardize climate-related disclosures. Through policy advocacy, CFA drives structural shifts in the investment landscape to enable climate investing.
In summary, through its education programs, standards, outreach efforts, and policy engagement, CFA Institute is playing an instrumental role in integrating climate change considerations into the investment practice and channeling investments into climate solutions. CFA’s initiatives are empowering investment professionals with climate investing capabilities and catalyzing the growth of this field.