CFOs and Professionals Play a Critical Role in ESG
The president of the Chartered Institute of Management Accountants (CIMA) and president of the association, Paul Ash, recently participated in a podcast with Financial Management to discuss the role of management accountants in strengthening ESG objectives.
The growing focus on ESGs by investors and regulators is shifting ESG reporting from voluntary to mandatory, a shift that is being observed globally, primarily in the EU. The EU proposed extending reporting on sustainability measures to all large companies as well as all companies listed on EU markets. In addition to the declaration, companies should present audit evidence on what they are reporting.
“Companies do not have the option of choosing whether these [sustainability issues] are real problems. The problems are there whether companies recognize them or not, ”said Jeffrey Hales, Ph.D., professor of accounting at the University of Texas at Austin and chairman of the Sustainability Accounting Standards Board (SASB). of this conversation because of the important role management control plays in information analysis. “
Companies that don’t work to comply with ESG practices could find themselves losing clients and investors, said Matthew Hurn, OBE, FCMA, CGMA and CFO for Disruptive Investments at Mubadala Investment Company.
ESGY invests in large growth companies practicing sustainable development
The call for companies to implement and follow ESG practices is under increasing pressure from investors.
The American Century Sustainable Growth ETF (ESGY) invests in large companies that practice sustainable development and strive to achieve measurable ESG objectives.
ESGY is an undiversified fund that invests in large cap companies with significant growth and value potential while ranking very high on ESG measures and is actively managed.
ACI’s proprietary model assigns a score to each security for financial metrics as well as a score for ESG metrics, which are then combined. The stocks with the highest overall rating are selected within each sector, creating a portfolio with strong performance and higher ESG ratings than stocks in the Russell 1000 Growth Index.
The fund is a semi-transparent ETF, which means that allocations are disclosed on a quarterly basis, not daily. In its last quarterly rebalancing, its top sectors in terms of weighting were Information Technology at 48%, Consumer Discretionary at 17%, Communications Services at 11% and Healthcare at 10%.
ESGY has a total annual operating expense of the fund of 0.39%.
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