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ESG Institute

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

SFA and its Members are Developing an ESG Framework and Reporting Standards specific to Structured Finance

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This year SFA welcomed members to the ESG Disclosures Taskforce. The members represent every role in securitization—issuers, investors, servicers, data services—to consider the environmental, social and governance impacts that are material and relevant to structured finance.

To participate in this important and timely work, please use the ‘Join Today’ button on the right of the screen.

Publications

October 5, 2021

During SFVegas 2021, SFA’s CEO Michael Bright and Federal Reserve Vice Chair Randy Quarles discuss how to think about climate risk considering the Federal Reserve’s overall mandate.

October 4, 2021

Watch Darlene Rosenkoetter, Vice President, Global Head of Government Affairs and Public Policy, from S&P Global Ratings provide an update at SFVegas 2021 on where the administration and regulators are heading with ESG.

October 4, 2021

Neil Hohmann, Managing Director and Head of Structured Products from BBH Investment Management, discusses assessing the different types of climate risk in securitization. John D’Elisa, Director, Societe Generale touches on defining what ESG means for issuers and investors.

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.

March 23, 2021

Michael Bright is joined by SFA President Kristi Leo and dv01’s Perry Rahbar and Charlie Oshman. They discuss what Environmental, Social, and Governance Investing (ESG) is, why it’s taking the finance market by storm, and what data is needed for ESG.

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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 Jeff Gudiel at [email protected]structuredfinance.org 

  • 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

May 20, 2022

On May 17, the EU Parliament’s Economic and Monetary Affairs Committee announced a series of proposals establishing new rigorous rules for the EU Commission’s regulation of the green bond market. The proposal aims to improve transparency and monitoring of the green bond market in an effort to reduce greenwashing.

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SFA News

April 26, 2022

SFA invites you to participate in our 2nd Annual Market Survey to continue tracking the integration of ESG (environmental, social and governance) considerations in structured finance issuance, investing and other activities as well as gathering market feedback regarding ESG disclosure practices including the SEC’s recently proposed rule on climate-related disclosure.

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Industry News

April 1, 2022

The Wall Street Journal reports that the Securities and Exchange Commission’s recent climate disclosure proposal would expand the exposure of public companies to securities litigation. As a replacement to voluntary sustainability reports which can vary between different institutions and industries, companies would mandate to disclose in greater, standardized detail their climate risks and how they plan to address them. The recently proposed requirements are criticized for introducing risk of litigation related to foreseeable allegations of misstatements, even if unintentional.

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Contact

Alyssa Headshot v6

Alyssa Acevedo

Vice President, Policy Development

Elen Callahan

Elen Callahan

Managing Director, Head of Research

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