ESG investing has been around for some time and juniors were asking if it is worth taking the certification. My answer is simple: Do you just want another cert to try to land a role, or do you sincerely hope to make some sort of impact in the world you live in today?
If it is the former, you don’t need this cert to work in the field. Nowadays, if you have some environmental science or engineering background, plus a little bit of knowledge in finance, many companies today are looking for talent to do carbon sequestration projects, GHG reduction projects, develop green technologies, deal with data audit to data collection…and the list goes on.
If it is the latter, then things get a little interesting. The syllabus gives a good overview of global initiatives, humanitarian disasters leading to the development of policies/regulations, lingering ESG issues, and challenges facing ESG integration for the investment industry and stakeholders. Integrating ESG factors into the investment process is a major portion of the syllabus, and serves as a useful guide from an analyst or portfolio manager perspective. If you had studied portfolio management in your CFA Level One course or others, the background knowledge helps.
Integration is challenging due to lack of explicit alignment with asset owners, varying scopes of disclosure, and/or different reporting standards used. The good news is that the industry is starting to get some standardisation and ratings from major providers are now being used by many fund managers.
Study Tips
Reading the syllabus alone can get quite dry, especially if you are used to the quizzes and calculations provided when studying for CFA exams. I help myself get through the “dry” patch by doing mind maps and looking up key words as I go.
When I tried the one mock exam provided by CFA Institute, I realise that some questions can have slightly different format versus those provided at the back of each chapter. (This is the case for the 2022 syllabus).
In the mock and actual exam, there are multiple questions related to particular case studies. Some questions can also turn out to be quite tricky, and may need you to do inverse selection of the ‘correct answers’.
In the end, I decided to purchase from one of the providers listed by the CFA Institute on their website: Alma Mundus *. It offers a mix of packages which you can pick for your preferences, and are affordably priced as compared to the rest.
It turned out to be money well-spent, given that I enjoy doing questions under time constrains, and I managed to pass the exams for my first attempt.
(*Disclaimer: Springboard has partnered with Alma Mundus on the ESG syllabus. Join our mailing list to get exclusive discounts and study tips.)
Exam Venue
You get to choose between a physical exam venue or an online exam. My advice: choose a physical venue especially if you are staying in the Asia time zone.
Most exam time slots for the online exam are in US time zone, so unless you love taking exams at night, your mind may not perform as well.
Secondly, Pro Proctor (prometric software) uses overseas human proctors enabled by AI. Most of them seem to be based in Mexico or some unidentified location. I had a hard time understanding instructions given their heavy accent, and have to change 3 proctors.
Lastly, if you don’t have access to an absolutely empty room with only your laptop and mouse, it can get very hard to qualify your room as exam-ready. Two of my proctors insist I remove my monitor, my huge printer on the floor, and a desktop at the far end of the room shared with other family members. Then I had to repeat all the exam preparation process to each proctor to varying standards: showing my ID, telling them my exam name, repeating my name etc…..you get the drift.
My exam was supposed to start at 9pm (GMT +8) but I ended up only able to start at 10.15pm, due to all the exacting requirements. By then, the stress is enough to make me almost reschedule my exams.
In addition, you need to ask for permission before you stretch, or move anywhere out of your screen. All in all, I find the hassle not worth it.
Concluding Thoughts
At the back of my head, I have always known climate change to be real, but the fact hit me most when I stood at a lake in Iceland, which used to be the foot of an ice mountain some 25 metres away. There was a sign post which indicates how much the mountain has ”shrunk” since 50 years ago.
Going through the studies helped me appreciate the environmental, social, governance issues that too many companies have ignored for way too long. Asset owners and asset managers now in a better position to influence sustainable outcomes. If we see ourselves responsible for capital deployment or allocation one day, we would be in a position to influence the actions and sustainability policies of companies armed with knowledge gained from the studies.
