The Freshfields Report argued that integrating ESG considerations was necessary in all jurisdictions under the perspective of fiduciary duty. Here's a detailed explanation:
* Fiduciary Duty: Fiduciary duty refers to the obligation of investment professionals to act in the best interests of their clients. This includes considering all factors that could materially impact investment performance, which encompasses ESG factors.
* Freshfields Report: The Freshfields Report, published by the UNEP Finance Initiative, concluded that failing to consider ESG factors could be a breach of fiduciary duty. It argued that ESG considerations are integral to the risk and return profile of investments, and therefore, must be included in the fiduciary duty of investment managers.
* Global Relevance: The report emphasized that this perspective applies across all jurisdictions, meaning that investment managers worldwide must integrate ESG factors into their investment processes to fulfill their fiduciary responsibilities.
* CFA ESG Investing References:
* According to the CFA Institute, the Freshfields Report was a landmark publication that established the importance of ESG integration as part of fiduciary duty (CFA Institute, 2020).
* This perspective underscores the necessity for investment professionals to consider ESG factors to protect and enhance long-term investment returns, thereby fulfilling their fiduciary obligations.