ESG Investing Certificate - How Useful?

Before you trash on ESG investing, pls know that I am skeptical of it too. FWIW I work at a LO shop and ppl make up ESG metrics all day to fit their stock pick preferences.

However, given that CFA Institute has just launched this ESG Investing program, just wondering how useful that'd be for someone working in a LO shop, either as a research analyst or a PM. I'm assuming that HF wouldn't give a rats axx about this.

All perspectives welcome.

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Comments (5)

Most Helpful
Nov 20, 2021 - 9:03am

kellycriterion

Not worth the paper it wasn't written on because they wanted to save the trees.

That is false.  I know, I ordered the hard copy.  Even better, I had it shipped by air from London back when it was still administered by CFAUK for the extra CO2 emissions.

On to the main question.  Personally, I don't believe that most ESG investing does anything except let the end user sleep better at night.  Impact investing *might* make a difference, but even that is debatable.

I got thrown into ESG fund construction years ago as one of the very many times I have been told "we don't have anyone who knows how to do this, so now it's your job."  I've learned quite a bit by doing and have launched half a dozen funds related to it.  I signed up for the cert last year because we were beginning another big push into ESG, and from past experiences CFAI designations are legit.--Even the CIPM is a beast.

I haven't sat yet, although I will shortly.  My experience from the material though is that if you already know what you're doing in the space it won't be difficult, although you may strongly disagree with some of their statements in the readings.  (If I can cite whitepapers from MSCI, a major ESG data and index vendor, less optimistic on the alpha generation possibilities than a supposedly neutral text that's an issue)  Like most of the CFAI certs though, I suspect it will get more difficult as it gains traction, so I'd rather take it now than wait.

As to usefulness, I imagine it will be pretty useful as long as ESG investing doesn't prove to be a bubble. (regulatory pressure suggests it won't)  I think CFAI basically has first mover advantage here with the first cert from a reputable source, so that's why I applied and will sit for it.  I might even add it to my email signature.  (I'm definitely not getting new business cards printed for it though)

The only difference between Asset Management and Investment Research is assets. I generally see somebody I know on TV on Bloomberg/CNBC etc. once or twice a week. This sounds cool, until I remind myself that I see somebody I know on ESPN five days a week.
  • 5
Nov 21, 2021 - 2:25am

Thanks for the reply. 

One follow-up: do you feel that this cert helps you advance within your firm in any way? You mentioned that you were already helping launch ESG funds so I guess that's becoming a quasi prerequisite for guys in your shoes. But more broadly for investment team staff (analyst/PM), have you observed / do you anticipate any career benefit?

It's 130hrs of study time so just want to make sure it's something worth spending that kind of time on.

Personally I don't believe in it but increasingly our LPs require this to be one of the criteria. And flow drives everything in our business so you just gotta drink the coolaid. Our firm now makes its analysts do these super long questionnaires for all covered companies - this shit isn't going away.

FWIW I'm a LO healthcare research analyst.

Nov 21, 2021 - 7:38am

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