I sat the exam for the CFA Certificate of ESG investing just after the owner and administrator of the certificate was changed from CFA UK to the CFA Institute. Knowing I passed it, which was instant, I jotted down a few notes about my journey and then paused to reflect before sharing my thoughts. In the year that has passed since I’ve also had time to connect what I learnt then with how I apply it in the workplace. Hopefully, my experience will be helpful to others who are considering sitting it.
Why I did it
Sustainability has been one of our priority research topics in the Institute for years, featuring in a good number of published research papers and events. There’s hardly a research meeting when we don’t talk about sustainability or climate change in some form. So wanting to obtain the CFA ESG certificate happened naturally when I was seeking learning and development opportunities.
After a quick conversation with my manager, I registered for the course and became one of the 27,000 people around the world who signed up to study for the ESG certificate1. I felt grateful for the support I received from my team and fortunate that my company has always had a very encouraging culture for personal development. The CFA Institute’s Future of Work survey showed 91% of respondents felt the urgency to develop new professional skills yet only fewer than half received support from their employers.
I was also hoping that studying for the ESG certificate would allow me to have a holistic overview of this subject and possibly a chance to piece together some of my fragmented understanding in this complex area.
What I learnt
The exam, which can be online or on-site, consists of 100 computer-based multiple-choice questions. The CFA Institute states that 100+ hours of study time is necessary but people with relevant ESG experience probably can pass it with fewer. The curriculum focuses on ESG integration, as one of its goals is to guide investment professionals in analysing and integrating material ESG factors in their day-to-day roles. I could certainly tell that the course material was written by people who work in this field. It’s also fully comprehensive and genuinely honest about the limitations and problems faced by the industry, such as greenwashing and data challenges as well as definitional and standardisation issues.
The course material touched lightly on some of the most important events in ESG history which I found very interesting. Knowing the path gave me more confidence about the future of ESG. The thought-provoking case studies gave useful insight into practical issues. They detailed how ESG strategies were implemented in different sectors around the world, emphasised the importance of collaboration, and showed how important nuance can be.
Can I claim that I’m an expert in ESG investing after passing the exam? Far from it. Sustainability is a profoundly complex subject and impossible to fully capture in a single exam.
The subject is evolving fast and has strong momentum. Data availability is improving, technology is advancing, and raising public awareness of sustainability issues can potentially be game-changing2. The course material obviously has issues with keeping up with this rapid development, even with the best efforts from the CFA Institute to refresh the material and exam on an annual basis.
Despite this constraint, studying towards the exam helped me to reconfirm what I learnt at work and allowed me to consolidate my understanding in a structured way. As with other professional qualifications, passing the exam doesn’t mark the end of the learning.
Is it worth doing?
The short answer is yes, especially if you haven’t had much exposure to sustainability. The course material covers a broad range of topics, which means the depth in each one is not overwhelming. This provides some relief from information overload, and helps with navigating the sustainability journey. I would encourage people to use it to develop the breadth of their knowledge as part of their T-shaped skills, but would point out that studying towards the ESG certificate is only the beginning of learning.
Sustainable investing was historically a niche market. With countries and organisations making sustainability and net zero commitments and assets pouring into sustainable investment products in recent years, the gap between the current availability of sustainability skills and what is required has opened wide3.
The CFA ESG certificate will not crack the skills shortage problem, especially with senior hires4. But as Mark Twain said, “continuous improvement is better than delayed perfection”. I certainly benefited from the study, and I believe the certificate is a step forward in filling the resources gap.
1 The CFA Institute Certificate in ESG Investing registrations number was disclosed by CFA Montreal without stating the date of the statistic.
2 The United Nations led the Decade of Education for Sustainable Development (DESD) programme between 2005-2014. Accompanied by a series of high-profile events and activities across the world. Public Awareness was identified as a critical tool for the transition to sustainable development. By the end of 2014, the programme laid a solid foundation of sustainability education supported by raising public awareness.
3 The CFA Institute’s 2020 Future of Sustainability report found a clear mismatch in supply and demand for ESG talents. Less than 1% of LinkedIn profiles of 1 million investment professionals listed sustainability-related skills.
The most recent article from ManpowerGroup “The Search for ESG Talent” showed that 94% of companies they surveyed lacked the necessary talent to support their ESG strategy.
4 Financial Times – Sustainable investing boom prompts fierce fight for talent: skilled senior ESG staff in asset management has become “an intense game of musical chairs in reverse, where more chairs are being added in each round”.