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CIFSC aims to provide ESG clarity with RI fund identification framework

The proposed identification framework is limited to investment funds that are domiciled or listed in Canada. To avoid adding more complexity to ESG conversations, CIFSC has designed its framework considering sustainable investment frameworks such as the CFA Institute’s Global ESG Disclosure Standards for Global Development and Investment Products in ESG.

“This framework is very closely aligned with the standards of the CFA Institute, but we do not require a fund maker to claim compliance with the standards identified under our framework,” Tam said. “Our proposed framework also complements the CSA fund disclosure guidance unveiled earlier this year, while not contradicting any regulatory requirements.”

As a disclosure-based framework, the CIFSC’s proposed system relies on investment fund makers in regulatory filings and other documents, including prospectus and memorandums of offer. The new draft framework is open for a 60-day consultation to end in June, at the end of which CIFSC voting members will review the comments and take it to a vote.

If they vote to accept and implement the draft, Tam says data providers under the CIFSC will begin work to consolidate their database of RI funds into a condensed list of products that will be covered under the framework. Let’s use at least one of the six approaches. While CIFSC still encourages advisors and investors to conduct additional research to determine the suitability of RI funds, Tam is optimistic that this will help address concerns around greenwashing.

“Before you can decide whether a fund is greenwashing or not, you have to understand the approach it claims to use. So I think this framework provides the first step for people to understand that. whether a fund is being deliberately misled,” Tam says.

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