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*A product of CFA Society of the United Kingdom (CFA UK)
Environmental, social, and governance (ESG) factors are increasingly part of mainstream investing as consumers and investors alike demand greater transparency and accountability from companies in relation to their impact and performance in these areas. As a result, more professionals in the industry are looking to gain a better understanding of how to integrate ESG factors into the investment process.
To help meet this demand, CFA Society of the UK (CFA UK) developed the Certificate in ESG Investing, which launched in September 2019. The purpose of the certificate is to familiarize professionals with the fundamental concepts and applications of ESG. It was designed in consultation with leading firms in the field and is endorsed by the Principles for Responsible Investment (PRI), a United Nations-supported independent body that encourages investors to use responsible investing for enhanced returns and risk management. CFA UK has partnered with other CFA member societies in Europe, including CFA Society Switzerland and CFA Society France, to offer the certificate, which has drawn over 6,000 registrations since its launch.
Given its increasing popularity in Europe and interest from international markets, CFA Institute is in the process of globalizing the certificate to make it accessible to candidates worldwide. This would make it the only global ESG certificate for practitioners created by practitioners. As of March 2021, the CFA Institute Certificate in ESG Investing is available in select North American markets, including Toronto and New York.
The Certificate in ESG Investing is designed for investment professionals, such as portfolio managers, trustees, and analysts, who want to learn more about how to incorporate ESG factors into their roles. While it is recommended that those registering for the certificate have a good understanding of the investment decision-making process, there are no formal entry requirements. This makes it suitable for anyone looking to increase their understanding of ESG in areas including, but not limited to, wealth management, consulting, product development, and risk.
The Certificate in ESG Investing is a self-study program, and graduates will receive a digital badge upon completion. Candidates are given up to a year to schedule the exam once registered, making it a manageable time commitment—graduates report an average of 130 hours of study. It is also affordable, as the certificate is offered at a competitive price point of GBP 485 (approximately CA$860).
The certificate is reviewed and updated annually by a panel of leading practitioners to ensure the content remains relevant to both current and future market environments. Candidates learn about common ESG factors, approaches to engagement and stewardship, and ESG integration in financial analysis and portfolio management. From a client perspective, the certificate covers how to incorporate ESG factors in investment mandates as well as challenges in measuring and reporting related performance.
Benefits
Investment firms that employ professionals with the certificate benefit from greater client confidence in their products and services. Based on a 2020 CFA Institute survey on investor trust, two-thirds of institutional investors believe the growth of ESG investing has increased trust in the financial services industry. Candidates learn about ESG integration in portfolio management, including its application in financial modelling and across different asset classes. In 2020, CFA Institute surveyed former candidates of the Certificate in ESG Investing and found that 86 percent of certificate graduates found the certificate beneficial to their career.
The Certificate in ESG Investing aims to fill a gap in ESG knowledge identified by investment firms and professionals. By globalizing the certificate, CFA Institute will give candidates worldwide the opportunity to learn about ESG integration from their UK counterparts in a market that has generally been perceived as a leader in this field.
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