A Complete Guide to CFA Exam Prep and Study Materials

Initially launched as a local certificate in the UK, the CFA Institute Certificate in ESG has evolved into a globally sought-after certificate for market participants seeking to deepen their knowledge in ESG related topics.

By today’s standards, the certificate has been adopted by the CFA Institute and is probably the most prestigious ESG or sustainable investment certification. Still, many wonder if ESG is just a temporary phenomenon that will likely soon fade into irrelevance, or is this just the beginning of a broader, global trend? In the following blog post, I like to give my 2 cents on where we currently stand in terms of ESG and how I personally see it developing in the future. After all, the CFA ESG certificate is not just another sustainable investment certificate.

Need to knows before registering ESG certification online

Again, to summarize what you need to know before taking the exam. Since September 2021, the CFA Institute Certificate in ESG Investing has been owned and administered by CFA Institute. Unlike the “traditional” CFA designation, the ESG Certificate is not a charter (you may not call yourself “John Doe, CFA ESG”) but rather an ESG certification online, so it is not a prerequisite to have passed any of the three CFA levels or to have relevant professional experience. As for the workload, it obviously depends on your financial literacy, but given the limited amount of calculations and modeling, I estimate it to be between 100 and 130 hours (the CFA recommends 130 hours). Also, I have personally spoken with people who have successfully passed the exam without possessing a CFA charter, and they did not feel that they lacked knowledge on any important topics. Finally, the exam can be scheduled freely within 12 months of enrollment, and the exam can be taken either in person or at your computer. So, (un)fortunately, you don’t have a typical CFA experience with hundreds of nervous candidates listening eagerly to the announcements being made but more of an ESG certification online. The exam itself is in multiple-choice format and includes 100 questions that must be answered within 140 minutes. The questions are either small cases with up to 5 questions, or stand-alone questions that test your knowledge on specific topics, or questions that test your understanding of how ESG is integrated into everyday decisions.

About the CFA investment foundation study material curriculum

Currently, the CFA study material consists of 9 chapters that begin with an introduction to ESG and end with practical ESG integration techniques. Personally, I believe that the curriculum is well written and touches on all the necessary concepts around ESG. I think that the CFA Institute Certificate in ESG Investing is structured in such a way that candidates will subsequently be aware of all the key ESG and sustainability concepts and will be familiar with the key concepts and challenges of ESG integration and ESG engagement. However, for candidates working in ESG or sustainability teams, further immersion is likely to be required, enabling them to write ESG investment policies that include values and standards-based exclusions, apply SFDR, etc. However, in my view, the CFA Institute Certificate in ESG Investing is a very good starting point regardless of the current job profile.

The CFA Institute Certificate in ESG Investing Syllabus:

Topic Topic name Allocation
1 Introduction to ESG 4–8 %
2 The ESG market 4–8 %
3 Environmental factors 6–12 %
4 Social factors 6–12 %
5 Governance factors 6–12 %
6 Engagement and stewardship 6–10 %
7 ESG analysis, valuation and integration 20–32 %
8 ESG integrated portfolio construction and management 8–14 %
9 Investment mandates, portfolio analytics and client reporting 4–8 %

Source: CFA Institute ESG Investing, Official Training Manual, Edition 3

Assuming where can I get CFA study material? Well, Brainie can help you with that!

Brainie is an independent provider dedicated to offering high quality preparation material for the CFA Institute Certificate in ESG Investing at a reasonable price. Based on the latest CFA investment foundation study material (Edition 3), we have written more than 400 questions designed not only to help you understand and memorize key concepts, but also to provide detailed answers that relate to the CFA Institute syllabus (e.g. 5.1.2 Companies need to operate .. ). Our goal was to complement the official CFA study material with an interactive tool that would help you test your knowledge and understanding of the concepts and fill in your knowledge gaps where necessary. In addition, our “Summary Notes” are designed to provide an overview and guide to all concepts, reports, data, and trivia. Our products are designed and written by practitioners who have passed the exam and therefore imply the knowledge acquired during the process.

Is ESG here to stay and will it help your career?

Working in asset management, I believe ESG is here to stay. Certainly, the concepts will continue to evolve, and this is just the beginning of a longer journey. However, in my role as an investment manager, I can observe firsthand the impact of ESG in day-to-day client conversations, market flows and changing market behavior. Certainly, external shocks such as the recent escalation between Ukraine and Russia are fueling discussions around the world about the shortcomings and benefits of sustainable investing. However, in my humble opinion, consumer preferences have changed and market participants will have to adapt. But as in many areas of life, the only constant is change, so we are certainly not at the end of the road in ESG investing, but we have crossed the bridge that makes ESG a basic requirement for many. From a risk/reward perspective, I personally think the CFA Institute Certificate in ESG Investing is an attractive investment. The cost and time associated with preparation for this sustainable investment certification is reasonable and can be discounted over many years, especially if you are early in the game and ESG and sustainability investing knowledge is still scarce and sought after. And even in the case that I’m completely wrong, the money and time invested is reasonable, and you can at least demonstrate a willingness to go the extra mile, and an ongoing thirst for knowledge. So, decent risk-reward, known upfront investment and potential long-term pay-off, what could potentially go wrong?

Patrick Rissi is the founder of Brainie, a provider of preparation materials for the CFA ESG. Brainie is committed to providing high-quality preparation materials at a reasonable price for the CFA Institute Certificate in ESG Investing. Our goal is not only to help you successfully complete the certification, but also to advance your career. Please feel free to contact us directly to start a conversation about how we can help you on your journey.