ESG investing is one of the big asset management trends, driven by the increasing financial relevance of ESG (environmental, social and governance) factors, better ESG data, growing investor demand and regulatory pressure.
This is creating a strong demand not just for portfolio managers – but finance professionals in general – with practical ESG expertise to help firms adapt and capitalize on this change.
If you’re serious about ESG, EFFAS’ Certified ESG Analyst® (CESGA) qualification may just be the right fit for you to augment your skillset:
- it is currently one of the higher level ESG investing certifications in the market;
- it is reasonably cost effective and time efficient;
- designed by leading European practitioners and is comprehensive yet practical;
- you can add a ‘Certified ESG Analyst®‘ or ‘CESGA®‘ title after your name upon passing.
Here’s all you need to know about the CESGA certification by EFFAS, let’s go!
Contents
- What is CESGA certification (Certified ESG Analyst)?
- Who is CESGA suited for?
- CESGA exam format
- CESGA exam pass rates, pass marks and difficulty
- What are the requirements for CESGA?
- Benefits of CESGA
- CESGA vs CFA ESG Investing: Which is right for you?
What is CESGA certification (Certified ESG Analyst)?
The European Federation of Financial Analyst Societies (EFFAS) is a non-profit organization founded in 1962, representing more than 18,000 finance professionals from 15 countries in Europe. Its goal is to set the standard for investment professionals’ requirements and promoting professional excellence through quality training and thought leadership.
With European countries leading the way with ESG investing standards and analysis, EFFAS launched one of the first ESG investing qualifications back in 2014 – the Certified ESG Analyst (CESGA) certification.
Since its launch, there are currently more than 4,362 CESGA title holders globally. By the end of 2023, this figure is forecasted to be more than 6,000.
With climate change and sustainability issues in the forefront of global agenda, the EFFAS Certified ESG Analyst qualification has registered exponential growth in Europe, Asia and increasingly the Americas since 2019:
Designed by industry practitioners and continuously updated, the CESGA program is comprehensive yet practical in their approach of teaching efficient valuation, measurement and integration of ESG issues into investment analysis.
Who is CESGA suited for?
The CESGA exam is a Diploma-level course that combines ESG know-how and fundamental company analysis valuation at both a basic and an advanced level.
What sets it apart from the other ESG certifications is that CESGA manages to strike a fine balance of:
- going into sufficient depth on key topics like ESG data and regulations;
- covering a broader range of asset classes aside from equity, such as private equity, commodities, sovereign and green bonds; and
- providing a practical framework to approach ESG valuation systematically in your daily work.
This makes the CESGA qualification appealing to a broad set of audience. Whilst particularly useful for financial analyst and portfolio managers, CESGA is also ideal for investment professionals in all roles – such as corporate sustainability officers, investor relations, auditors, consultants and financial planners – who wish to embrace ESG integration holistically.
CESGA exam format
The EFFAS CESGA exam is a 2.5 hour long exam, which consists of 2 equally weighted parts:
- 20 multiple choice questions (MCQ, 50% of exam score); and
- a practical case study with 9 constructed-response style questions (50% of exam score). This is based on a company due diligence process from an ESG perspective.
Interestingly, negative marking is used for the MCQ section. This means that points are actually deducted for incorrect answers, rather than being worth zero points. This is probably done to encourage serious candidates to study the course with thorough preparation, given the relative smaller number of questions.
The CESGA exams are held quarterly, i.e. 4 times a year in March, June, September and December (see Key Dates section below for more details):
- In-person exams are available mostly in UK, Europe, Singapore, Hong Kong and Mexico, although due to COVID-19, this is currently more limited.
- Online/remote exam option is also now available globally, do check that you meet the CESGA online exam requirements beforehand.
Similar to other professional designations such as CFA program, CESGA is also a self-directed learning program:
- Interestingly, EFFAS is also the (sole) CESGA course training provider. The exam fees already include the online training videos, study materials and practice questions (see Exam Fees section for further details).
- In terms of study hours, for candidates with no prior ESG experience, 80-120 hours of study is recommended to prepare for the CESGA exam.
CESGA exam pass rates, pass marks and difficulty
Although not officially benchmarked by UK ENIC yet (a UK education agency that benchmarks international qualifications for comparability), EFFAS’ Academic Director has confirmed that CESGA certification is a Diploma equivalent, and in theory should be pitched to Level 5.
This means that CESGA exam difficulty broadly equates to a Diploma, similar to CFA Level 1.
To pass the Certified ESG Analyst exam, students must demonstrate their knowledge by gaining more than 50% of the 120 points (60 points each section), and in each section have at least 30% of the answers correct.
This means that a candidate with 10 points from the constructed response section and 60 points in the MCQ – or vice versa – will not pass despite having a total score of more than 50%.
Since 2021, CESGA results are typically announced about 5 weeks after each exam. Candidates would only receive a pass or fail notification, with no details on exact scores or pass marks. Similar to other examination bodies, EFFAS does not accept requests to review or appeal the exam results.
Despite being one of the higher level ESG qualifications in the market, the global average pass rate for CESGA since 2016 is quite high at 82%.
This may be due to a combination of factors, such as highly skilled candidates, negative marking, stricter passing requirements and making the training program mandatory to ensure candidates are serious and well prepared before attempting the exam.
Topic areas & weights
The EFFAS CESGA syllabus has 9 modules plus an additional complementary 10th module. Module 10 is not tested in the exam itself, but is a useful supplementary reading about regional developments in ESG investing.
In the 2.5 hour CESGA exam, here’s where the individual modules would be tested:
- Module 1-8 are equally weighted and would be tested in the 20 multiple choice questions section (50% of exam); and
- Module 9 would be tested in the case study section with 9 constructed-response style questions (50% of exam).
Here’s a detailed overview of the 10 modules covered in EFFAS’ CESGA’s latest curriculum and their respective topic weights:
| EFFAS CESGA Syllabus | Description | Topic Weights |
|---|---|---|
| Module 1: Recent Developments in ESG Integration | An introduction into the current state of sustainability integration within the financial sector. Understand the drivers of the demand for ESG, the barriers and challenges associated with ESG integration. An overview of empirical studies on ESG investment and the implications for sustainable investment. | 6.25% |
| Module 2: Regulatory environment | An introduction into the current state of sustainability regulations in the European Union and international trends. Describes the relevant regulations for corporations and investors, to understand current international trends and future developments. It also discusses the interconnectedness between different regulations and future regulatory trends. | 6.25% |
| Module 3: ESG-Strategies | This module is focused on different strategies to incorporate ESG-considerations. It provides an overview of the current sustainable investment landscape and explains the variety of ESG strategies and their distinctive features. | 6.25% |
| Module 4: Responsible Investing Across Asset Classes | This module concentrates on different investment assets and the various ESG considerations applicable to each asset class. It reviews how ESG-strategies can be developed according to different asset classes. | 6.25% |
| Module 5: ESG Reporting (with a more European orientation) | Explains the difference between reporting requirements and reporting frameworks. It aims to familiarize the participant with the key reporting frameworks and the ongoing trend toward convergence. Discusses the key sources of ESG information and ESG raw data issues, and why indicators are used. The concept of ESG materiality and double materiality would also be discussed. | 6.25% |
| Module 6: ESG Integration in Research | This hands-on module focuses on how to integrate ESG information into investment decisions. It discusses how to identify ESG value drivers based on global mega trends, how to conduct a qualitative analysis of corporate governance, particularly board effectiveness, how to analyze sector-specific environmental and social issues on a qualitative basis. After these analyses, learn how to conclude by assessing consistency with the business model. | 6.25% |
| Module 7: ESG Integration in Valuation | This module discusses how to integrate qualitative analysis of material challenges into quantitative valuation models. Discuss how ESG information influences financial estimates. Learn how ESG is integrated into valuation models for equities, fixed income, and other asset classes. | 6.25% |
| Module 8: Investment Decision Process | Learn the general steps of the investment process chain, understand the challenges and effects of integrating ESG into the investment process. | 6.25% |
| Module 9: Case Study – ESG Integration in The Investment Decision | This practical cash study module combines all the knowledge and skills in the previous 8 modules and focuses on application. Learn a company due diligence framework which takes ESG into account. The module covers examples on research and portfolio management. | 50% |
| Module 10: ESG Regional Developments: ESG in Asia Pacific – where we stand | This is a complementary module will not be tested in the exam. Summarizes the regulatory framework in Asia, discussing the new ESG developments in Japan, China, Hong Kong, Singapore and other Asia Pacific markets. | 0% |
Exam fees & costs
EFFAS’s training arm, EFFAS Academy administers the CESGA exams and its mandatory online training program.
The total CESGA exam fee is EUR €1,500 + VAT (i.e. local sales tax, if applicable). This is roughly equivalent to US$ 1,710, which consists of:
- Exam registration fee of €250 (US$ 285), plus
- CESGA online training course of €1,250 (US$ 1,425), which is mandatory as part of the CESGA exam registration.
All fees shown are net of any local sales tax payable by the candidate in their country of residence. Where EFFAS Academy is required to add local sales tax, this will be added to the fees shown during the payment/checkout process.
While seemingly more expensive at first glance, EFFAS’ CESGA exam fees actually includes everything you need to prepare for the exam, with all the online videos, study materials, practice questions and mock exams included.
When you register, you will gain a 6-month access to the following study materials and resources:
- Digital version of the curriculum
- E-seminars for each module (recorded videos for online learning)
- Course slides
- Supplementary references and sources
- Multiple-choice questions for self assessment
- 2 specimen exams
All the study materials can be downloaded in PDF format from the platform.
Unlike the CFA program, once you pass the CESGA exam and obtain your Certified ESG Analyst title, there are no further annual membership costs to pay for the right to use your CESGA title.
Resitting the exam costs €250 + VAT (~US$ 282), while extending the study platform access for another 6 months costs €450 + VAT (~US$ 508).
Exam dates & key deadlines
The CESGA exams are held 4 times a year in March, June, September and December.
Here are the latest exam dates and registration deadlines for 2023 exams:
| CESGA exam dates | Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 |
|---|---|---|---|---|
| Registration opens | 10 Oct 2022 | 9 Dec 2022 | 29 Mar 2023 | 15 Jun 2023 |
| Final registration | 13 Feb 2023 | 8 May 2023 | 28 Aug 2023 | 13 Nov 2023 |
| Exam day | 17 Mar 2023 | 9 Jun 2023 | 29 Sep 2023 | 15 Dec 2023 |
What are the requirements for CESGA?
EFFAS’ CESGA certification is designed to be approachable to all, with no prerequisites or minimum entry requirements to enrol in the Certified ESG Analyst course.
That said, finance professionals or those with some work experience are likely to join the program with a higher-level of understanding and may initially gain more from the course.
Candidates who successfully pass the CESGA exam will receive the EFFAS Certified ESG Analyst Diploma and a digital badge, as well as earning the right to use the Certified ESG Analyst® or CESGA® trademark.
There are no additional costs or yearly membership requirements to maintain the right to use the CESGA title. That said, EFFAS continues to help its CESGA title holders stay up to date with the latest ESG developments with continuous research, conferences and news updates.
Benefits of CESGA
Having a Certified ESG Analyst qualification could be a unique differentiator in your finance career, especially with ESG investing expected to grow exponentially.
Given the relatively low time and money investment, the reasonably high pass rates and the right to use the CESGA® title without additional costs, EFFAS’ CESGA certification could be a good return of investment which allows you to clearly signal your practical ESG expertise in your career.
By completing and earning the CESGA ESG certificate, you can expect to:
- Gain practical understanding and skills to integrate ESG considerations in your career;
- Obtain a clear, increasingly recognized certification title in ESG field (CESGA®) to signal your sustainable finance expertise globally;
- Improve your career prospects and differentiate yourself from other job candidates;
- Diversify your career profile and augment your existing skillset to broaden your career opportunities;
- Pave your way for further finance designation such as CFA, FRM, or CAIA as you further specialize.
CESGA vs CFA ESG Investing: Which is right for you?
In short, while both qualifications focus on sustainable finance, here’s what we think are the main differences between them:
- Difficulty level: CESGA is a higher-level qualification (Diploma, estimated at Level 5), whereas CFA ESG Investing certificate is benchmarked at Level 4 under the UK Regulated Qualifications Framework (RQF). Both qualifications require similar study hours.
- Content depth and breadth: Given the above, it’s not surprising that CFA Institute’s ESG Investing course is more introductory in nature, where content is focused on lots of theory and description. CESGA does cover the basics for those new to ESG too, but there’s a little more breadth and depth covered on issues such as applying ESG across various asset classes, regulation, integrating ESG factors into valuation. CESGA also covers 2 comprehensive cases studies on company valuation and portfolio management in a separate module which may offer a more practical edge.
- Price: Total cost for CESGA is higher compared to CFA ESG Investing’s certificate as the former also includes its mandatory online training course and materials.
- Geographical focus: ESG is a global approach. With Europe leading the way with ESG standards, CESGA covers general global standards and analyses the European regulatory developments in depth because they might be a blueprint for other regions. Its content is constantly updated to reflect regional developments (e.g. Module 10).
- Global reach: EFFAS’ CESGA qualification is well recognized in Europe, and gaining traction around the world, especially in the Asia Pacific region. CFA Institute’s ESG Investing certificate is also available worldwide.
- Certification title: We feel this is one of the biggest factors to consider if you’re serious about the ESG sector. Upon passing CESGA, you can add the ‘Certified ESG Analyst’ or CESGA® title behind your name. But that is not the case with CFA Institute’s ESG Investing Certificate, as confirmed by FT as well, all you have is a digital certificate you can put on LinkedIN.
Both EFFAS Certified ESG Analyst (CESGA) and CFA Institute’s ESG Investing Certificate are now available globally in most countries.
While both are good quality qualifications from reputable organizations on ESG investing, the choice depends on key factors mentioned above: budget, employer recognition, geographical preference and preference for certification title.
Here’s a summary table between two ESG qualifications:
| EFFAS’ Certified ESG Analyst (CESGA) | CFA UK’s Certificate in ESG Investing | |
|---|---|---|
| Suitable for | Particularly useful for financial analyst and portfolio managers, but also investment professionals of all roles (e.g. sustainability officers, investor relations, auditors, consultants and financial planners etc), who are looking to integrate ESG issues into the investment process. | Students who are keen on an investment career; or Investment professionals of all roles (asset management, sales & distribution, wealth management, product development, financial advice, consulting,risk etc), who are looking to understand and integrate ESG issues into the investment process |
| Pre-exam qualifications | None, although some work experience in finance is helpful. | None, althoughsome insights in the investment process is strongly recommended (via formal qualification or experience) |
| Number of Exams | 1 | 1 |
| Exam Frequency | 4 times a year in March, June, September and December. Also available to book for remote proctoring at home globally. | Available to book throughout the year (except weekends and holidays) for in-person exams globally. Also available to book for remote proctoring at home globally. Maximum 4 attempts in 4 months |
| Exam Format | 20 multiple-choice questions and 9 constructed-response questions in 2 hours and 30 minutes. On-site computer-based testing or online remote testing | 100 multiple-choice and item setquestions in 2 hours and 20 minutes On-site computer-based testing or online remote testing |
| Pass Rates | Average pass rates of 82% (2016-2021) | Between 60%-75% |
| Fees and Costs | US$ 1,710 (€1,500 + VAT), which consists of $285 registration fee plus $1,425 online training course. | US$ 675 |
| Study Hours Needed | 80-120 hours | 130 hours |
| Post Exam Requirements | None | None |
| Certification Title Upon Passing | Title holders can add the “Certified ESG Analyst®” or CESGA title after their name. No annual membership to maintain the title. | None |
Overall, EFFAS’ Certified ESG Analyst certification seems to represent a good return on investment for those serious about the ESG investing sector, and are looking to clearly differentiate themselves with a higher level of sustainable finance credentials from a leading European organization.
Is the CESGA qualification something you’d consider taking on to enhance your ESG credentials?Let us know in the comments below!
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