Advancing ESG in MENA: An Exclusive Interview with Dana Day, Managing Director, EMEA of The Chartered Financial Analyst CFA Institute who sheds light on CFA Institute’s Impact on MENA’s Professional Labor Market: Fostering Growth and Sustainability, among other topics.
How is the CFA Institute contributing to the advancement of ESG worldwide and in the MENA region in particular?
A distinct and tangible sense of urgency exists to address ESG issues worldwide. We remain dedicated to our efforts as it relates to providing the education professionals need through our suite of professional learning offerings, our flagship CFA Program, and additional certificates.
Investment professionals play an important role in translating sustainability commitments into action – understanding, analyzing, and ultimately placing value on an issuer’s ESG plans and intentions. We have an important role to play in ensuring the investment professional of today is well-prepared for the task.
We are specifically focused on educating and upskilling investment professionals to integrate ESG factors into the investment selection process if a client requests this. We strive to educate the industry both through the inclusion of ESG analysis in the CFA Program and through our ESG Certificate.
Our data show that many investment professionals lack the skills necessary to properly assess and incorporate sustainability considerations. We must be cognizant of the tools that they need in order to do so successfully.
Our Certificate in ESG Investing gives investment professionals the technical knowledge and practical applications they need to understand the fundamentals of climate change and the integration of ESG into the investment process, so that they can effectively evaluate a company’s disclosures and understand their client’s needs. Those who earn the Certificate will be better equipped to place sustainable practices at the forefront of investment considerations, ultimately contributing to more holistic financial analysis. Since launch, over 600 people in the MENA region have registered for our Certificate in ESG Investing, many with support from top global employers who recognise the value of empowering their employees with knowledge in this subject, as well as signaling investment in their workforce in order to continue to be competitive.
To underscore this skills gap, ESG specialists are also in high demand from a hiring standpoint, but the existing pool of experts is limited. We recently evaluated a sampling of executive LinkedIn profiles and found that less than one percent had sustainability expertise. In contrast, the same research found that nearly 20% of all portfolio manager job postings sought sustainability expertise.
When we set out to develop our ESG Disclosure Standards for Investment Products, there was a consensus that confusion exists in the market as it relates to the quality and comparability of information around ESG products. Our ESG Standardsare global in nature and ensure transparency and safeguard trust, two values that are integral to our mission. Critically, they provide greater transparency and consistency in disclosures, resulting in clearer communication and comparability regarding the features of investment products. As these disclosures become more widespread, investors will begin making their investment choices based on better, clearer, more comparable information.
There have been recent calls to halt AI research and implementation – how will that affect the CFA Institute and its programs?
The asset management industry is facing myriad challenges in the wake of the pandemic, as well as other headwinds. With respect to AI research and implementation, this is where our Research, Advocacy and Standards, and our professional learning courses comes into play for our members globally.
We recently launched two reports that I consider to be essential reading for investment professionals to operate in an increasingly automated landscape.
Ethics and Artificial Intelligence in Investment Management: A Framework for Professionals recognises the spectrum of issues that AI tools and big data bring to investing, and it sets out questions for professionals and investment teams to consider when working with AI technologies. The paper combines fundamental ethical principles with the applicability of relevant professional standards to offer a decision framework to guide the development of responsible AI applications in investment management.
In Cryptoassets: Beyond the Hype An Investment Management Perspective on the Development of Digital Finance, we offer a dispassionate review of the development of digital finance from the point of view of investment practitioners with recommendations for fiduciaries, investors, and policymakers.
Most recently, we launched the Handbook of Artificial Intelligence and Big Data Applications in Investments, which reveals how asset managers are using AI and big data technologies to augment the investment process in pursuit of enhanced investment and business outcomes.
We also offer a host of professional learning courses to help keep our members current on the latest developments in the industry. For example, we have courses on natural language processing, machine learning, decentralised finance, with more on the way.
How is the CFA institute contributing to the professional labour market in the MENA region?
At CFA Institute, we have a role to play in continuing to unlock the potential of this thriving region, and we try to do that in two distinct ways. First, our core work involves developing human capital – it’s the new individuals coming into the market who we’re educating in good practice and in sound investment skills. Our Codes and Standards, which are truly universally applicable, can help to develop more resilient capital markets and better governance.
Second, we advocate for market integrity, so that the marketplace in which professionals operate — if they bring that sound judgement to bear — can benefit society. In the MENA region, we have 3399 members who share our mission with 190,000 fellow members worldwide: to lead the investment profession and promote the highest standards of ethics, education, and professional excellence for the ultimate benefit of society.
You recently announced a range of amendments to your programs – how will that impact the MENA region in particular?
The CFA Program has been evolving ever since it was introduced in 1963. The investment profession does not stand still and nor can the Program. Technology and innovation continue to drive relentless change in the financial markets and so we must continuously improve and modernise the Program to ensure its ongoing value, to address the way candidates learn, and to prepare them for successful careers, supplying the industry with the well-trained, ethical professionals it requires.
The six changes we recently announced are among the most significant that we’ve made to the CFA Program, which is commonly known as the gold standard in the investment profession due to its rigor and for its ability to prepare investment professionals for success. We supply the industry with the well-trained, ethical professionals it so requires and these changes are applicable to the MENA region as much as anywhere else.
To focus on a few of the changes: the self-contained, digital practical skills modules to teach candidates on-the-job, practical applications will no doubt be of value to MENA candidates. Students who are two years away from completing their undergraduate degree will be able to enroll for Level I of the CFA Exams and this will hopefully appeal to those studying at higher education institutions in the MENA region, as a signal to prospective employers that they are committed to pursuing a career in investment management. Additionally, our improved digital badging strategy will reinforce the value of Level I and Level II achievements to candidates on their CFA Program journey. Candidate feedback suggests that a formal acknowledgement of completing Levels I and II would be beneficial in their search for internships and full-time positions as an indicator of the seriousness of their commitment to a career in the investment profession.
We undertook extensive research with candidates and the financial services industry at large to inform the changes to the Program (more information is detailed in the press release). These enhancements will maintain the rigor of the Program and continue to set the educational standard for the financial industry. Earning the charter will remain the crowning, coveted achievement that it has always been for an early-career finance professional.
About CFA Institute
CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion of ethical behavior in investment markets and a respected source of knowledge in the global financial community. Our aim is to create an environment where investors’ interests come first, markets function at their best, and economies grow. There are more than 190,000 CFA charterholders worldwide in 160 markets. CFA Institute has nine offices worldwide and 160 local societies. For more information, visit www.cfainstitute.org or follow us on Linkedin and Twitter at @CFAInstitute
 | ReplyForward |