Topic: ESG investing (2024)

FAQs

How hard is the CFA ESG exam? ›

The passing rate for this certificate is around 70%, and the passing mark is also around 70%. Compared with other exams by the CFA Institute, the difficulty of CFA ESG is much lower, which can be interpreted that the certificate has lower value than CFA Level 1.

The ESG Investing Certificate is ideal for finance professionals who want to understand how environmental, social, and governance influence investment strategy. If you're a financial advisor, asset manager or work in risk analysis, getting ESG certified could benefit your career.

CFA Institute recommends 130 hours of study time to achieve the Certificate in ESG Investing. Experienced professionals may only need around 100 hours to study for this exam. What are pass rates like? The global average pass rate is reported to be 71% (source: CFA Institute, December 2022).

Market Distortion. Another key argument against ESG investing is its potential to distort market mechanisms and investment priorities. By favoring companies that meet specific ESG criteria, investors might inadvertently inflate the value of these companies, creating bubbles in "green" or "sustainable" sectors.

A survey carried out using a sample of 50 CFA Level I candidates reveals an average IQ of 105. Assuming that IQs are distributed normally, carry out a statistical test to determine whether the mean IQ is greater than 100.

Many CFA charterholders consider the Level 3 CFA Exam the most difficult because of the time and thought needed to answer the constructed responses successfully. While the typical Level 3 CFA Exam pass rates are the highest of the CFA Exams, only around 56% of CFA candidates pass the exam.

A heavy ESG focus can pose investment risk

Because some funds exclude fossil-fuel companies, for example, that hurt their relative performance in recent years when energy stocks were surging, he says. A tendency among some ESG funds and ETFs to favor growth companies has also been a hindrance of late.

For existing professionals who are planning a finance career change, achieving an ESG qualification can be a great way to add skills relevant to a growing sector to a resume. That said, even those professionals who already enjoy stable careers within the financial sector can take advantage of an ESG certification.

The CFA Institute Certificate in ESG Investing exam: Consists of 100 standard multiple-choice questions. To be completed within 2 hours and 20 minutes. Administered in person at test centers in select markets*

The cost to register for the Certificate in ESG Investing is USD 865. When you register, you may choose to purchase a hard copy of the syllabus (the Official Training Manual) with registration for an additional USD135 + shipping.

How many hours do you need for CFA ESG? ›

To study for the CFA ESG certificate exam, candidates with no professional experience in ESG investing should expect to study around 100 hours. Candidates with professional experience in the curriculum topics should anticipate studying around a little less than 100 hours.

Candidates are not eligible to retake the exam once they have passed.

Critics say ESG investments allocate money based on political agendas, such as a drive against climate change, rather than on earning the best returns for savers. After sweeping through battles in statehouses across the country, the war against ESG investing is heating up in Congress.

ESG risks, which stand for environmental, social, and corporate governance – refer to a company's environmental, social, and governance factors which could create a bad reputation, such as by greenwashing or harming the company financially.

In a line used by proponents, those in opposition to the ESG movement also believe there is substantial support behind them. “ESG investments are often opposed by conservatives who feel that ESG investments favor one political ideology and pressures companies to adopt 'woke' policies they don't support,” says Bruce.

Data complexity and scope: ESG reporting covers a broad spectrum of environmental, social, and governance issues, each with its own set of indicators and data requirements. Tracking and collecting data across these diverse dimensions can be complex and resource-intensive.

Level 3 of the CFA exam is considered the easiest of the three levels. However, compared to other major financial exams like the CFP and CPA, it is still brutal. The pass rate is just 52%.

Pass rates & difficulty

In addition to the (zero) fees, what makes Investment Foundations certificate really attractive is the relatively high pass rates. 82% of the candidates passed the first Claritas exam, and CFA Institute expects the CFA Investment Foundations' pass rates to be around 60-85% on average.