Guidance and case studies for ESG integration: equities and fixed income

Portfolio managers and analysts are increasingly incorporating ESG factors into their investment analyses and processes. However, ESG integration remains in its relative infancy, with investors and analysts calling for more guidance on exactly “how” they can “do ESG” and integrate ESG data into their analysis.

CFA Institute and Principles for Responsible Investment (PRI) set out to create a best practice report (Guidance and case studies for ESG integration: equities and fixed income) and three regional reports [one for the Americas (AMER), one for Asia-Pacific (APAC), and one for Europe, the Middle East, and Africa (EMEA)] to help investors understand how they can better integrate ESG factors into their equity, corporate bond, and sovereign debt portfolios.

We are able to achieve this goal by:

surveying 1,100 financial professionals, predominantly CFA members, around the world;
running 23 workshops in 17 major markets;
interviewing many practitioners and stakeholders;
publishing more than 30 case studies written by equity and fixed-income practitioners;
analyzing Bloomberg’s ESG company disclosure scores; and
reviewing data from the PRI Reporting Framework, the largest global database of information on investors’ ESG practices.

This publication, Guidance and case studies for ESG integration: equities and fixed income, provides a global insight on the ESG integration techniques of leading practitioners across all regions of the world and includes case studies by analysts, portfolio managers, and investors, who share how they integrate ESG into their analysis and tell their stories of ESG integration.

It also introduces an ESG integration framework that can be a reference for practitioners to use when comparing their ESG integration techniques with their peers’ ESG integration techniques and identify those techniques that are suitable for their own firm. We hope the work presented here helps both equity and fixed income investors to better understand the many ways in which they can integrate ESG analysis into their investment decision making.