The body that grants the prestigious title of chartered financial analyst is entering the world of sustainable investing by offering a certification for finance professionals who want to bolster their environmental, social and governance bona fides.
The CFA Institute’s ESG certificate, which was initially developed by the CFA Society of the UK, will be available globally starting on Monday. It requires candidates to complete 130 hours of self-directed study and pass an exam lasting two hours and 20 minutes. However, unlike the flagship CFA programme, those who pass will not get to add any additional letters behind their name.
The push into the ESG market comes after the CFA Institute announced it would dismiss almost 120 people as part of a plan to “modernise the organisation”.
Margaret Franklin, president and chief executive of the CFA Institute, sees an increasing focus on ESG as an important part of that plan. There is an “astronomical gap” between the soaring demand for sustainable investment products and the limited number of people with the expertise needed to create them, she told the Financial Times.
“The nature of portfolio management is changing, and so the real strategy is to make sure that we have those learnings available for the investment professional,” she said.
This is the CFA Institute’s second foray into ESG. Last year, it announced its intent to enter the crowded world of sustainability metrics, and has pledged to forge ahead despite facing pushback from the asset management industry.
The organisation has also come under fire from “demoralised” workers under pressure to roll out new computer-based exams and students who faced delayed examinations as a result of the pandemic.
A CFA employee last week criticised the organisation for not focusing on getting the exams up and running again. But Franklin disputes the assertion that the CFA has “taken its eye off the ball”.
“We have our core group working on getting the [CFA] exam across the line for computer-based testing,” she said. “We’ve got a big one coming up in May, with 150,000 candidates who will be writing the exams. So it’s been obviously imperative for us.”
Having earned her CFA designation in 1997, Franklin will not be joining the group taking the institute’s flagship exam online, but she will attempt to attain the new ESG certification later this year.
“A CFA charter is just not a one and done,” she said. “In 1997, I can guarantee you we didn’t have an ESG section. I would have thought: ‘What acronym is that? I have no idea. Is that in the bond section?’”