Finding appropriate ESG qualifications

9 December 2021

ESG is expected to grow in popularity, so where do paraplanners start to acquire sufficient knowledge on this quite complex area? Catherine Esland, senior paraplanner at Succession Wealth and member of the PFS Paraplanner Panel, considers some of the formal qualifications which may help

It is increasingly clear that climate change is one of the most important global risks, not only in terms of potential impacts on individuals and communities, but also in terms of financial impacts on businesses, supply chains and the wider economic system.

We are seeing increased momentum on tackling social inequalities across the globe. Improving working and living conditions, not only helps individuals but is also as a way of potentially improving economic growth and maintaining global stability.

Given such context, it is hardly surprising that Environmental, Social & Governance (ESG) investing and other forms of responsible investment are becoming increasingly popular. However, as a paraplanner, it can be difficult to know where to start when trying to understand the potential benefits and pitfalls.

Having recently reviewed the qualifications options available when looking to further my own knowledge, the following is a brief overview of the main options which paraplanners might want to consider:

The first qualification available in the UK and is probably the best known is the CFA Certificate in ESG Investing. This is a level 4 qualification designed to deliver the knowledge and skills required to understand how ESG factors can be integrated into the investment process. It is a multiple-choice, online exam typically taking 130 hours study. The course and exam currently cost £485. Having recently studied and passed this certificate, I found it a useful and thorough introduction. The current syllabus is focused on investment management, as opposed to wider financial planning, but is pitched at a level that most paraplanners would probably be comfortable with. A digital certificate and badge are available on passing to evidence the qualification.

In addition to the ESG Certificate, the CFA are now offering a new Certificate in Climate and Investing which will open at the end of January 2022 with the first online exam sessions available from March 2022. Again, this is a level 4 qualification, but specifically focused on understanding climate as it relates to investing and how to integrate climate change considerations into the investment process. The course and exam currently cost £495.

Another climate focused option is the new Certificate in Climate Risk a joint enterprise between the CII, CISI and Chartered Banker Institute (CBI) via the Chartered Body Alliance. This is again a multiple-choice exam, currently costing £595. After covering similar climate background to the CFA awards, this certificate focuses on the skills needed to measure, monitor, and report climate risks. This is most likely to be relevant to investment managers but may be of interest if you build your own portfolios in-house or want to understand more of the detail around the investment processes.

The CISI and CBI also offer a Green and Sustainable Finance Certificate which is the first global, benchmark qualification in the green finance sector. This has been designed by the banking industry to develop and demonstrate the specific knowledge and expertise needed to help direct investments to support the transition to a low carbon world, so comes from a perspective of finance raising. It is again multiple choice and online, costing £595.  This is the shortest exam at only one hour and is designed to be possible to study in as little as 12 weeks. Upon completion, candidates will be entitled to use the designation Green and Sustainable Finance Professional.

We are still in the early stages of ESG integration in mainstream investment and we can probably expect to see further developments in terms of qualifications over time. Before selecting a qualification, I would certainly recommend reviewing the syllabus to check you are comfortable with the course coverage. I would however strongly encourage anyone interested in ESG and or climate issues to consider looking at some of the above qualifications as a good introduction to a fast growing and increasingly relevant area of financial services.

This article was first published in the December 2021 issue of Professional Paraplanner

Professional Paraplanner