The investment industry is constantly evolving, and the only way to ensure we, as CFA charterholders, don’t get left behind is to constantly evolve as well by continuously learning and building our knowledge and skills. Our workplaces and clients expect this commitment to enhancing our professional competence.

While CFA Institute does not impose mandatory continuing education requirements on its members, CFA charterholders are encouraged to complete at least 20 Professional Learning (PL) credits annually, which include two hours of Standards, Ethics, and Regulations (SER) credits. Members can earn credits by attending industry events, watching webinars, reading articles, textbooks and other publications, and consuming the vast CFA Institute resources for professional learning. Members can also receive credit for non-affiliated resources, where one PL credit equals one hour of educational activity. CFA Institute provides an online list of examples of activities that qualify for PL credits, as well as a Professional Learning Guidebook, and awards digital badges and milestone certifications. Digital badges, earned when members attest to 5, 10, 20, 25, 30, and 35 consecutive years of PL credits, can be shared with employers and on platforms like LinkedIn to prove commitment to continuous learning. This signals to potential and current clients, employers, and the investment community the importance held in ensuring skills and knowledge are up to date and relevant.

CFA Institute Resources: Easily track your credits using this tool

If keeping track of your credits seems onerous, CFA Institute simplified this task for members. After completing one of their resources, click the “Register PL Credits” button, which automatically adds it to your account and tallies the credits completed over the year.  

Follow these steps to find resources relevant to your interests:   

1. Go to Professional Learning Content Resources
2. Select “PL/SER Credits” under “Professional Learning” (filters those with associated credits)
3. Filter based on your preferences under “Topics” or by type of media
4. Register PL Credits

How I earned my PL credits using the above method

I used the above method to earn most of my credits in the last year. To demonstrate the types of resources available and how this method can be used by most of us, regardless of our fields of expertise, I have summarized the first five articles I used to earn my PL credits, below. 

Regardless of your field of study, I hope this helps shed light on the extensive resources members can access to improve our skills and knowledge. Happy learning!  

Article summaries

ESG and Responsible Institutional Investing Around the World: A Critical Review, by Pedro Matos – 2PL

The author conducts an extensive literature review of environmental, social, and governance (ESG) investing. Objective comparisons of companies’ sustainability practices are complex, given that companies’ ESG/Corporate Sustainability Reporting is voluntary and at their discretion. Capital markets would benefit from a better quantity and quality of sustainability information, as it could lead to better capital allocation, greater liquidity, and a lower cost of capital. One paper reviewed in the study finds that ESG-friendly companies benefit from a lower cost of capital compared to sin stocks. The author points to some issues in using ESG data, such as the lack of agreement on ESG issues, and notes that while some criteria can be objectively measured, many require subjective decisions. 

Which Corporate ESG News Does the Market React To? By George Serafeim and Aaron Yoon – 2PL

This article analyzes how markets react to various corporate ESG news, finding that stock prices react only to financially material ESG news, which are defined for each industry by organizations like the Sustainability Accounting Standards Board. These price reactions were more significant for positive ESG news that related to social capital issues, rather than issues related to natural or human capital. 

Climate Change Vulnerability and Currency Returns, by Alexander Cheema-Fox, CFA, George Serafeim, and Hui Wang, CFA – 2PL

The authors conclude that non-G10 currencies are more vulnerable than G10 currencies to physical risks from climate change. They explore several reasons for this, including the diversion of investments into long-term goals like human capital and education. Changes in weather patterns can cause reductions in labour productivity, negatively impacting the efficiency of the export sector. The physical risks of climate change could damage physical infrastructure and reduce agricultural output, which could also negatively impact exports and countries’ trade balances. From a yield-seeking perspective, the lower interest rates due to the loosening of monetary policy as a response to climate disasters can decrease their attractiveness.

Some interesting sources mentioned in the study include the International Disaster Database (EM-DAT), with data on the occurrence and impact of natural and technical disasters, and the Notre Dame Global Adaptation Initiative (ND-GAIN Index), which measures a country’s vulnerability to climate change. 

Supply Chain Climate Exposure, by Greg Hall, Kate Liu, Lukasz Pomorski, and Laura Serban – 2PL 

The authors propose a different supply chain climate exposure measure as a business-weighted average of standalone climate exposure of a firm’s customers and suppliers. They state that climate supply chain metrics, such as Scope 3 emissions, have a lot of noise in their estimations and are motivated not by climate risk but by carbon accounting. They propose their measure could be used along with Scope 3 emissions data, as they have a different focus on financial risk exposure. 

The authors make an interesting point regarding the focus of investors on Scope 1 and 2 emissions, which they believe may have led to some companies increasing what they call “emissions offshoring,” defined as the practice of buying more carbon-intense components from suppliers instead of producing them internally. Components produced in-house increase a company’s Scope 1 emissions, while those bought from suppliers increase Scope 3 emissions. 

Litigation Risk and Stock Return Anomaly, by Jun Duanmu, CFA, Qiping Huang, and Yongjia Li – 2PL

Shareholders are granted the right to sue companies for damage caused by managers’ misconduct by security class-action litigation. The authors find that defendants tend to experience a significant decline in their stock price when shareholder litigation is filed in relation to reputation costs and inferior stock performances. This type of litigation has many negative consequences for companies, including higher external financing costs, lower corporate reputation, and a reduction in corporate takeover efficiency.