Busted! Have you fallen for any of these ESG myths?
Our resident mythbuster, Mohini Singh – ACA, Director of Financial Reporting Policy at CFA Institute and Treasurer of the XBRL International Board of Directors – is back. This time she’s turned her attention to environmental, social and governance (ESG) ideas, in a new guest post in the Taggings section of the XBRL international website. It acts as a great introduction to the world of ESG as it gains both traction and misconceptions, with insights into how investors and companies may be thinking.
There’s increasing interest in ESG investing… but the first bubble she bursts is that ‘ESG investing’ exists at all! While it may not be helpful to think of ESG as a separate approach, ESG is an important prism that should contribute to a more thorough overall analysis and higher returns. Mohini also tackles the difference between ESG screening and ESG integration, a more fundamental incorporation of ESG into the investment process.
Her final myth is the idea that there is no need for companies to structure ESG disclosures. While regulators do not yet require it, Mohini argues that structured reporting allows companies to position themselves as market leaders, and tell their own ESG story to investors by giving them better information.
Read more here.