CFA Sustainable Investing / ESG Certificate (Exam-Prep)

An independent, free exam-preparation course built around the publicly published CFA Institute Sustainable Investing Certificate (formerly the Certificate in ESG Investing) curriculum. It walks through the nine official chapters — from the ESG market and the rationale for responsible investment, through the environmental, social and governance factors in depth, to engagement and stewardship, ESG analysis and valuation, integrated portfolio construction, investment mandates and client reporting. It adds the surrounding ecosystem an analyst is expected to know: the PRI Principles, ESG ratings and data, the regulatory landscape (EU SFDR, the EU Taxonomy), climate risk and the TCFD/ISSB framework, materiality standards (SASB), and a dedicated exam-strategy module. It uses visual lessons, worked examples, original self-check questions and a 45-question final exam to build exam-ready understanding. It is awareness/prep only — not the official CFA Institute curriculum or the proctored certificate exam — and claims no CFA Institute affiliation or endorsement. The course is organized into 22 modules, ending with a final exam (pass mark 80%). It is independent, free exam-preparation training — not an official or accredited review course.

What you'll learn

• What ESG & Sustainable Investing Are
• The ESG Market: Size, Drivers & Rationale
• Environmental Factors I: Climate Change
• Environmental Factors II: Natural Capital & Pollution
• Social Factors I: Human Capital & Labour
• Social Factors II: Stakeholders & Human Rights
• Governance Factors I: Boards & Ownership
• Governance Factors II: Remuneration & Audit
• ESG Strategies: Screening, Integration, Thematic & Impact
• ESG Analysis, Valuation & Integration
• ESG Integration in Equity
• ESG Integration in Fixed Income
• Engagement & Stewardship
• The Six PRI Principles
• ESG Ratings, Scores & Data
• Materiality: SASB & ISSB Standards
• Reporting & the TCFD Framework
• Regulation I: EU SFDR
• Regulation II: The EU Taxonomy
• Climate Risk in Portfolios
• Portfolio Construction, Mandates & Client Reporting
• Exam Strategy & Final Review

Learning objectives

• Explain what ESG and sustainable investing are, why demand has grown, and how responsible-investment approaches differ.
• Analyse environmental factors — climate change, natural capital, pollution and resource use — at country, sector and company level.
• Analyse social factors — human capital, product liability, stakeholder relations and human rights — and their financial materiality.
• Evaluate corporate-governance structures: board quality, ownership, remuneration, shareholder rights and audit.
• Apply ESG integration across equity and fixed-income analysis and valuation.
• Design and conduct engagement and stewardship activities, including proxy voting and escalation.
• Map the regulatory landscape: the PRI Principles, EU SFDR, the EU Taxonomy and TCFD/ISSB climate disclosure.
• Distinguish ESG strategies — screening, integration, thematic and impact — and assess ESG ratings, data and materiality (SASB).
• Construct ESG-integrated portfolios, define investment mandates and report to clients with credibility.
• Pass a 45-question exam (80% to earn your certificate).

Course modules in brief

What ESG & Sustainable Investing Are

Environmental, Social and Governance (ESG) investing is the systematic consideration of material ESG factors alongside traditional financial analysis when making investment decisions. Sustainable investing is the broad umbrella term the CFA Institute now uses; ESG integration is one approach within it. The certificate begins by separating these ideas from related but distinct concepts: responsible investment, socially responsible investment (SRI), impact investing and ethical investing.

The ESG Market: Size, Drivers & Rationale

Chapter one of the official curriculum frames the ESG market: its relevance, size and scope, the key drivers behind its growth, and the challenges and criticisms it faces. Growth has been driven by client demand, regulation, materiality evidence, fiduciary-duty reinterpretation and a growing body of academic research linking ESG quality to risk-adjusted returns.

Environmental Factors I: Climate Change

Climate change is the headline environmental megatrend. The curriculum requires you to distinguish physical risk (acute events and chronic shifts) from transition risk (policy, technology, market and reputational change as economies decarbonise), and to understand mitigation versus adaptation.

Environmental Factors II: Natural Capital & Pollution

Beyond climate, the environmental pillar covers natural capital — biodiversity, water, land and ecosystem services — plus pollution, waste, and the transition to a circular economy. These are analysed at country, sector and company level, because materiality is highly sector-specific.

Social Factors I: Human Capital & Labour

The social pillar starts inside the company: human capital management, health and safety, labour standards, diversity and inclusion, and employee engagement. Strong human-capital practices are linked to lower turnover, higher productivity and reduced operational and reputational risk.

Social Factors II: Stakeholders & Human Rights

The outward-facing side of the social pillar covers customers (product safety and liability, data privacy), suppliers (supply-chain labour and modern slavery), and communities (human rights, the UN Guiding Principles on Business and Human Rights). These create real financial exposures: recalls, fines, litigation and lost licence-to-operate.

Governance Factors I: Boards & Ownership

Governance is often considered the foundation that enables good environmental and social performance. The curriculum examines board structure and independence, separation of chair and CEO, board diversity and expertise, ownership structures (dual-class shares, controlling shareholders, state ownership) and shareholder rights.

Governance Factors II: Remuneration & Audit

Executive remuneration, audit quality, internal controls, business ethics, anti-bribery and tax transparency complete the governance pillar. Pay structures matter because they shape management incentives — long-term, ESG-linked pay can align managers with sustainable value creation, while poorly designed pay can encourage short-termism or excessive risk.

ESG Strategies: Screening, Integration, Thematic & Impact

The certificate requires you to distinguish the main responsible-investment approaches cleanly, because they are frequently confused. The core families are: negative/exclusionary screening, norms-based screening, positive/best-in-class screening, ESG integration, thematic investing, and impact investing.

ESG Analysis, Valuation & Integration

This chapter is the analytical heart of the certificate. ESG integration means systematically adjusting financial forecasts and valuation models for material ESG factors — revising revenue growth, margins, capex, the discount rate or terminal value, rather than treating ESG as a separate, qualitative overlay.

ESG Integration in Equity

In listed equity, ESG integration affects security selection, weighting, engagement and voting. Analysts adjust company-level forecasts for material ESG factors, and portfolio managers may tilt exposures or set ESG constraints at the portfolio level.

ESG Integration in Fixed Income

In fixed income, ESG factors map onto credit risk: they can affect default probability, recovery and spread. Because bondholders usually lack votes, engagement works differently — through dialogue at issuance and around refinancing. The curriculum also covers labelled bonds: green, social, sustainability and sustainability-linked bonds.

Engagement & Stewardship

Stewardship is the responsible allocation, management and oversight of capital to create long-term value. Engagement — purposeful dialogue with companies — and proxy voting are its main tools. The curriculum distinguishes engagement from simple investor relations, and covers objectives, escalation (from letters to voting against directors to public campaigns) and collaborative engagement.

The Six PRI Principles

The UN-supported Principles for Responsible Investment (PRI) are the global backbone of the industry, and the certificate expects familiarity with them. Signatories commit to six voluntary principles, from incorporating ESG into analysis and ownership policies to seeking disclosure, promoting acceptance, working collaboratively and reporting on progress.

ESG Ratings, Scores & Data

ESG ratings and data providers (MSCI, Sustainalytics, ISS and others) score companies on ESG performance, but their methodologies differ — leading to well-documented rating divergence, where the same company can score very differently across providers. The certificate requires you to understand how ratings are built, their limitations, and the difference between risk-based and impact-based scores.

Materiality: SASB & ISSB Standards

Materiality determines which ESG factors actually matter for a given industry. The SASB Standards (now under the ISSB) identify financially material sustainability topics on an industry-by-industry basis, which is exactly the discipline an ESG analyst needs to avoid drowning in irrelevant data.

Reporting & the TCFD Framework

The Task Force on Climate-related Financial Disclosures (TCFD) created the dominant framework for climate reporting, structured around four pillars: governance, strategy, risk management, and metrics & targets. Its recommendations have been absorbed into the ISSB's IFRS S2 standard, making them effectively the global baseline for climate disclosure.

Regulation I: EU SFDR

The EU Sustainable Finance Disclosure Regulation (SFDR) is the most influential ESG regulation globally. It imposes disclosure obligations on financial-market participants and classifies products by their sustainability ambition — commonly summarised as Article 6 (no specific ESG focus), Article 8 ("promotes" ESG characteristics) and Article 9 (a sustainable-investment "objective").

Regulation II: The EU Taxonomy

The EU Taxonomy is a classification system defining which economic activities count as environmentally sustainable. An activity must substantially contribute to at least one of six environmental objectives, do no significant harm (DNSH) to the others, and meet minimum social safeguards.

Climate Risk in Portfolios

Bringing climate analysis up to the portfolio level, this module covers carbon footprinting, weighted-average carbon intensity (WACI), portfolio alignment (implied temperature rise, net-zero pathways) and climate scenario analysis. These tools let an investor measure and manage transition and physical risk across a whole book, not just one name.

Portfolio Construction, Mandates & Client Reporting

The final official chapters cover ESG-integrated portfolio construction, defining investment mandates and objectives, and reporting to clients. ESG objectives must be translated into an Investment Policy Statement, expressed as constraints, tilts, benchmarks and KPIs, then monitored and reported with portfolio analytics.

Exam Strategy & Final Review

The official Sustainable Investing Certificate exam is a computer-based test of around 100 standard multiple-choice questions, sat within a six-month window, with a recommended 100+ hours of study. This module turns content knowledge into exam performance: time management, reading the stem carefully, eliminating distractors, and recognising the high-yield, definition-heavy topics that recur (materiality, the strategy taxonomy, SFDR articles, TCFD pillars, PRI principles).

Exam and certificate

The course has 22 modules and ends with a final exam; the pass mark is 80%. An independent, free exam-preparation course built around the publicly published CFA Institute Sustainable Investing Certificate (formerly the Certificate in ESG Investing) curriculum.

Frequently asked questions

Is this course free?

An independent, free exam-preparation course built around the publicly published CFA Institute Sustainable Investing Certificate (formerly the Certificate in ESG Investing) curriculum.

Is this an official CFA Institute Certificate in ESG / Sustainable Investing course?

An independent, free exam-preparation course built around the publicly published CFA Institute Sustainable Investing Certificate (formerly the Certificate in ESG Investing) curriculum. It is independent, free exam-preparation training — not an official or accredited review course.

What does “What ESG & Sustainable Investing Are” cover?

The central premise is that ESG factors can be financially material — they affect risk, return and the cost of capital — and that ignoring them leaves a part of the investment picture unanalysed. This is different from a purely values-based exclusion of "sin stocks".

What does “The ESG Market: Size, Drivers & Rationale” cover?

You must be able to describe the main market participants — asset owners, asset managers, data and ratings providers, and regulators — and the different motivations (value, values and impact) that bring them to the table.

What does “Environmental Factors I: Climate Change” cover?

You should be able to explain greenhouse-gas accounting concepts — Scope 1, 2 and 3 emissions — and the role of carbon pricing, the Paris Agreement and net-zero commitments in shaping company strategy.