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ESG Certification Guide

By: Kaplan Schweser
August 8, 2022
ESG CFA Certification Guide

An ESG certification is a credential individuals can gain to demonstrate their knowledge of and use of environmental, social, and governance factors in institutional investment analysis. This type of analysis is important to companies who want to understand the overall value and sustainability of an organization or investment.

TABLE OF CONTENTS

Is an ESG Certificate Worth It?

If you are a financial professional that helps investors or companies make investment decisions, gaining an ESG certificate is worth it. ESG investing is a rapidly growing practice within the institutional investment field and investors are looking for individuals with a good understanding of the different approaches to responsible investment.

Who Should Have an ESG Certificate?

Broadly speaking an ESG certificate can benefit anyone who works in operations, strategy, or management within the institutional investment field. 

An ESG certification can be especially useful for CFA Charterholders, CAIA Charterholders, and Certified FRMs who would like to move into a more senior position and accelerate their careers. Even sales and distribution, wealth managers, product developers, financial advisors, consultants, or risk managers can benefit from improving their understanding of ESG issues.  

Undergraduate and graduate students who are interested in pursuing a career in the investment industry may also benefit from earning an ESG certificate. 

How an ESG Certificate is Beneficial for a CFA Charterholder

An ESG certificate is beneficial for a CFA Charterholder because it provides the opportunity to demonstrate their commitment to being up-to-date on current ESG investing practices and knowledge of ESG issues. 

An ESG certificate can help CFA Charterholders differentiate themselves and improve their investment analysis skills with environmental, social, and governance factors in their financial models, ratio analyses, and risk assessments. 

When To Get an ESG Certificate

Since an ESG Certificate would be beneficial to virtually any financial professional's career, a good time to get an ESG certificate would be when someone has the time to pursue the credential. Since an ESG certificate broadly covers ESG investment factors and issues, if someone has the time to dedicate to studying and they have an interest in accelerating their career, now is a good time to get an ESG certificate.

Best ESG Certificates

There are a few providers of certificates that incorporate ESG topics into their curriculum.

Provider

Certificate

Best Fit

CFA Institute

Certificate in ESG Investing

  • Investment professionals who want to understand ESG issues and incorporate ESG factors into the investment process.
  • Students or any professional who want to pursue a career in institutional investment.

College For Financial Planning

Chartered SRI Counselor℠ (CSRIC ®)

  • Financial advisors and investment professionals with a foundational knowledge of the history, definitions, trends, portfolio construction principles, fiduciary responsibilities, and best practices for sustainable, responsible, and impact (SRI) investments.

European Federation of Financial Analysts Societies

Certified ESG Analyst® (CESGA)

  • Financial analysts and portfolio managers who want to integrate ESG data in their capital allocation processes.

Global Association of Risk Professionals

Sustainability and Climate Risk Certificate (SCR)

  • Risk managers who want to understand the effect of climate change on organizations and how to manage that risk.
  • Students who want to pursue a career in risk management.

Sustainability Accounting Standards Board

Fundamentals of Sustainability Accounting (FSA) Credential

  • Professionals in corporate finance, investor relations, and corporate accounting who want to better understand the link between financially material sustainability information and a company’s ability to drive enterprise value.


How To Become ESG Certified

To become ESG certified an individual must complete an official program that provides a certificate in ESG topics. There are a few providers and each will have its own enrollment requirements and post-exam requirements but in general, to become ESG certified, they will need to

  • Meet enrollment requirements
  • Enroll in the program
  • Begin preparing for the exam(s)
  • Register for the exam(s)
  • Pass the exam(s)

How Long Does It Take to Earn an ESG Certificate? 

Most ESG certification programs take about one year to complete. Each program has its own steps to earn an ESG certificate, which will dictate exactly how long it takes to earn the certificate. Especially if more than one exam is required or the candidate doesn’t pass the exam the first time. Both factors determine how long it will take to earn an ESG certificate.

What is the CFA ESG Certificate?

The CFA ESG Certificate is a professional certification program offered by the CFA Institute. It is designed to meet the investment industries' increasing demand for more instruction and standards in environmental, social, and governance investing.

The Certificate in ESG Investing program was originally offered only in the United Kingdom but now is offered globally to anyone interested. The program is open to investment professionals or students with a foundational knowledge of the investment process.

How to Study for the CFA ESG Certificate Exam?

To study for the CFA ESG certificate exam, candidates with no professional experience in ESG investing should expect to study around 130 hours. Candidates with professional experience in the curriculum topics should anticipate studying around 100 hours.

Once a candidate decides which category they belong in, they should begin to review the ESG curriculum and read through the program syllabus. The syllabus will tell candidates what skills and knowledge they are expected to have. 

After becoming familiar with curriculum topics and learning expectations, candidates should begin preparing for the ESG certificate exam. During this prep time, registered candidates will receive access from the CFA Institute to self-assessment questions and a mock exam that should be used strategically. 

Once a candidate has their ESG prep materials and study plan, their success will be determined by how committed they stay to following their study plan and remembering to register to sit for the exam within one year of registering. 

How To Register for the CFA ESG Certificate Exam?

Registering for the CFA ESG certificate exam is straightforward. Simply create an account with the CFA Institute, and look for a link to register for the certificate in ESG Investing program via email. Once candidates register for the program, they will have up to one full year to schedule the exam. 

Expert Tip: It is recommended that candidates begin studying before actually scheduling a date to sit for the exam.

CFA ESG Certificate Exam Information

Learn important details for the Certificate in ESG Investing from the CFA Institute.

CFA ESG Certificate Exam Topics and Weights

Notice the weight given to topics such as “ESG Analysis, Valuation, and Integration” and “ESG Integrated Portfolio Construction and Management.” These two topics make up a significant portion of the curriculum and will certainly test candidates' ability to apply a range of approaches to ESG analysis and integration across a range of asset classes.

Curriculum Topic

Topic Weight

Introduction to ESG4-8%
The ESG Market4-8%
Environmental Factors6-12%
Social Factors6-12%
Governance Factors6-12%
Engagement and Stewardship6-10%
ESG Analysis, Valuation, and Integration20-32%
ESG Integrated Portfolio Construction and Management8-14%
Investment Mandates, Portfolio Analytics, and Client Reporting4-8%

 

CFA ESG Certificate Exam Costs and Fees

The Certificate in ESG Investing program from the CFA Institute costs $675 USD to enroll in. If candidates want a hard copy of the syllabus they can purchase one for an additional $135 USD. If a candidate does not sit for the exam within one year of registering, their registration will expire and no refunds will be issued. Candidates will need to re-register again and pay the same $675 USD to enroll back into the program. 

CFA ESG Certificate Exam Dates

Technically there are no specific exam dates for the Certificate in ESG Investing exam. CFA ESG certificate candidates just need to schedule to sit for the exam within one year of registering into the program at selected Prometic sites worldwide or in select areas online. 

Expert Tip: Candidates will not be able to sit for the exam on holidays or weekends. 

CFA ESG Certificate Exam Pass Rates

The pass rates for the CFA ESG certificate have been historically high. As of the end of January 2022, the average pass rate for the Certificate in ESG Investing exam was 81%. The certificate will have lifetime validity once a candidate has passed the exam. 

CFA ESG Certificate Exam Format and Duration

The CFA ESG certificate exam format contains standard multiple-choice questions and item set questions. Item set questions consist of a vignette (a long question) which after reading, candidates will be asked to answer 4-6 multiple choice questions from that vignette. 

CFA ESG certificate candidates will have 2 hours and 20 minutes to complete the exam, which includes a survey at the end. 

CFA ESG Certificate Exam Grading Process

The grading process for the CFA ESG Certification exam is pass or fail. 

Job Opportunities After Becoming ESG Certified

There are lots of career paths available to individuals who become ESG certified. Jobs are prevalent throughout various industries including finance, government, risk management, and energy. 

Individuals who earn ESG certificates hold job titles such as

  • ESG Analyst
  • ESG Advisor or Associate
  • Sustainability/ESG Director
  • Director Sustainable Finance
  • ESG Sales & Delivery Manager
  • ESG Program Manager

Ready To Start Preparing for the CFA ESG Certificate?

As you get ready for the CFA ESG Certificate exam, consider making a Kaplan Schweser ESG Certificate prep package—complete with classes, study tools, and mock exams—the centerpiece of your mission to earn a passing score.

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