Is CFA ESG Certification Worth It?
Starting in 2019, the CFA Institute has been offering ESG certification to anyone who is willing to register. At the start, that number was small, but between the COVID-19 pandemic and other global issues, more people began to realise how much ESG matters to people and to the business world.
Sustainable practices require a sustainable mindset, and the ability to assess the ESG factors that result in ESG risks is key to making responsible investment decisions, ones that consider environmental issues, supply chain, social responsibility and carbon emissions, to name a few, within the wider scope of business operations.
ESG Factors In To Business
When it comes to ESG, fortunately, investors and companies around the world are reacting quickly to current issues. Some of it is in ESG regulations, and the corresponding acceleration in the legislation of ESG reporting standards.
However, in other cases, it’s the longer-term demand of investment professionals willing to dive into ESG, and many organizations are looking for asset managers, ESG consultants, or an ESG analyst who can bring foundational knowledge in sustainability to bear on due diligence services, ESG screening, risk assessments and other key performance indicators that will ultimately impact a portfolio strategy or which investment funds to consider.
As a result of this shift, over 27,000 people globally signed up for the CFA ESG certification. The certification promises both practical application and technical knowledge in ESG investing and helps to distinguish individuals from typical investors.
But the big question is: is all of that worth it?
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The Cost Of Admission
As this LinkedIn post outlines, the cost of the course is simply the registration cost. This amounts to $795 USD. This includes an official training manual (in pdf form), access to the CFA Institute Learning Ecosystem (LES), and administration fees.
A budget option is to buy the hardcover. It costs $135 USD plus shipping costs. A simple search on Amazon for “CFA ESG Book” and you might find an even better option. The only catch is that you want the current edition. The 2023 edition is Edition 4, and the book should reference that on the front page.
Should you fail the exam and have to retake it, it costs $595 USD. And if you happen to reschedule your exam, you’ll have to pay a $30 USD fee as well as provide a 72-hour notice before the exam date.
All in all, the fees are reasonable. Adding ESG certification, in general, allows job seekers to ask for a 20% premiumcompared to those without it. It’s clear that the single benefit outweighs the financial cost.
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Other Costs To Consider
But setting aside the cost, there are other barriers to consider, such as who can enroll, if prior qualifications are needed, and time costs.
In terms of who can enroll, the CFA Institute has no entry criteria. Although the CFA Institute recommends people have a general understanding of what ESG investing is and how it fits into the broader scope of things.
With that in mind, applicants also don’t need to be in the CFA programme to apply for this course. That said, it’s worth noting that the CFA ESG certification is most appealing to those in the investing sector. Beyond that, working in wealth management, risk management, sales and distribution, product development, financial advice, and consulting sectors can also see the benefit of having CFA ESG certification.
Given the fact that the CFA Institute offers a pdf format of the book with the registration fee, it’s fair to say this is all done online. There is further flexibility in that there isn’t a specific or fixed date beyond the CFA allowing candidates six months.
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Freedom to Plan Your ESG Strategy
During those six months, you’re allowed to plan, study, and decide when to do your exams. In terms of study time, the CFA Institute recommends about 100–130 hours of studying. This is based on whether you’re an investment professional or not. The only real limitation is how many exam spots are available and the cut-off or cycle periods the CFA discloses. That cut-off period is at the end of the year.
Overall, these other costs are not that cumbersome for individuals who want to pursue obtaining this certificate. What will be the most challenging is the exam itself, which still follows the CFA’s high standards and will demand a plan, a lot of commitment, and practice.
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ESG Certification: Is It Worth It? Yes.
Despite the hurdles and the fees that go along with them, the costs are well worth it. ESG is an overall new investing philosophy, and that movement is going to gain more traction as governments demand companies create better ESG reports.
Leading practitioners of that sustainability mindset, the ability to bring enterprise value by putting sustainability issues at the centre of the investment process, will have a distinct advantage as the ESG model of business normalizes across each industry.
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Takeaway: ESG Investing In Yourself
Beyond that, the general public and investors alike are keen to have companies dive into ESG, as it’s a movement that extends beyond companies solely making a profit. There is an emerging sense that 'value' is something to be determined in more ways than one, and businesses that are socially responsible, considering governance, and analyzing environmental impact, are essentially understanding that building a sustainable future can go hand in hand with developing longer-term value, ESG initiatives, and better informed risk management.
Bearing this in mind, a CFA ESG course is highly relevant for individuals looking to put ESG issues front and centre, and will serve as a springboard for those looking to grow in their specific industry and with ESG as a whole.
Need more information on ESG education? Bookmark our ESG Certifications & Courses to keep track of daily updated offerings globally, both in-person and online via universities, business schools, and more.