ESG Task Force

$11.6 trillion – or $1 of every $4 invested in the United States – was invested under ESG investment strategies.

This year, SFA launched an effort to assess how environmental, social and corporate governance (ESG) investing and reporting can be applied and accessed in the securitization market. As part of this effort, we held our inaugural SFA ESG Symposium, a daylong roundtable focused on applying ESG principles in our market.

We are encouraged by the robust dialogue among the broad range of market participants at our symposium and look forward to developing work streams through which participants can develop best practices that will add value to the entire industry for ESG investing applications.

Publications

January 19, 2021

Sustainable Investing is an investment discipline that integrates environmental, social and governance (ESG) considerations to the investment process and straddles across equity and fixed income markets. The unprecedented volatility that has come to define 2020 is expected to boost flows into an already thriving ESG market. SFA is committed to guiding the securitization industry towards a goal of building a robust ESG market in structured finance.

November 20, 2020

Growing ESG in securitization: 81% of issuers incorporate ESG in their overall business operations, 73% within asset origination/underwriting practices, and 56% sponsoring or developing ESG-focused ABS/MBS programs. “Client Demand” is #1 factor motivating ESG for Institutional Investors in securitization. View the results and takeaways of SFA ESG Engagement survey.

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Learn More

Environmental, Social and Corporate Governance, or ESG, investing has now hit the mainstream as a consideration – and increasingly a key driver – of investment approaches and analysis for individuals and institutions alike. ESG investing has its roots in what began as ‘socially responsible’ investing in the 1960s, when investors began to screen their investment opportunities based on industry involvement such as tobacco production and sales or a company’s dealings in South Africa with respect to the apartheid regime. Today, there is broad acceptance and interest in ESG investing with the existence of targeted mutual funds, indices, and there is also a growing focus on data availability and analysis by ratings agencies and analytics firms.

 

ESG FACTORS

Environmental

  • Climate change
  • Natural resources
  • Sustainability

Social

  • Diversity
  • Human rights
  • Consumer protections

Governance

  • Corporate governance
  • Corporate behavior
  • Compensation structure

 

The above categories are high level and only scratch the surface of the ESG-relevant activities that investors – and issuers – may choose to focus on.

For our part, the Structured Finance Association has very recently launched an effort to assess how ESG investing and reporting can be applied and accessed in the securitization market. As a jumping off point the Association has begun work on identifying a framework for reporting on ESG factors within the assets of ABCP vehicles at the conduit level.

On December 5, 2019, SFA held an ESG Symposium that brought together nearly 200 engaged participants for a day-long conversation to promote ESG principles within the structured finance market.

SFA has published Key Takeaways from the Symposium which can be downloaded via the link below. Additionally, some of the slides that were presented by our guest speakers are available below.

 

SFA ESG Symposium: Key Takeaways

 

Below please find slides from some of the presenters:

The symposium encouraged important dialogue among a broad range of market participants and SFA looks forward to hosting additional ESG events in the future.

If you’re interested in joining SFA’s ESG Task Force, please email Hunter Hamrick at [email protected]

  • According to Harvard Business Review, over $11.6 trillion of all professionally managed assets – $1 of every $4 invested in the United States – were under ESG investment strategies, a sharp 390% increase from 2010 when the amount was close to $3 trillion overall.
  • ESG is such an important consideration that major stock exchanges such as the New York Stock Exchange have introduced their own sustainability guidelines, such as the Principles for Responsible Investment.

“ESG issues that have financial implications are increasingly part of business decisions, and investors who embrace these changes will be the industry leaders of the future. SFA is helping to define these issues and create the right frameworks that will make ESG data more transparent for investors.”

- Libby Bernick Head of Sustainability, DBRS Morningstar

News

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Industry News

August 25, 2021

Findings from a newly published report by Accenture found that investors across all demographics are increasingly demanding more holistic and less generic advice on Environmental, Social and Governance (ESG) investments. Accenture surveyed 1,000 demographically diverse investors across the U.S. and Canada and found that nearly 60% of investors have asked for advice on ESG investments, and 84% plan to purchase an ESG product in the next year.

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Industry News

July 28, 2021

During a UNPRI webinar on July 28, U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler announced the agency will aim to propose rules by the end of the year that will require corporations to publicly disclose the risks they face from climate change. The upcoming proposal will likely call for businesses to provide “qualitative” and “quantitative” information to investors as a mechanism for more market transparency.

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Industry News

June 21, 2021

The Securities and Exchange Commission (SEC) is expected to require public companies to report more information around climate risk and other environmental, social and governance disclosures (ESG).

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Contact

Jennifer Earyes

Jen Earyes

Head of Policy

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Alyssa Acevedo

Vice President, Policy Development

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