A Guide to ESG Certifications for Individuals — CFA ESG vs GARP SCR vs CESGA vs SASB FSA?

Is an ESG certificate worthwhile?

Everyone knows ESG is trending in the financial industry. But, how exactly?

Listed companies are now required by some stock exchanges to disclose of ESG data. For example, the HKEx has required Hong Kong’s listed companies to publish ESG reports alongside their annual reports since 2022. This also means in-house and external accountants and auditors now need ESG skill sets to serve their clients on ESG auditing and reporting.

Fund managers now widely adopted ESG metrics in their investment strategies. For example, over 4,000 fund managers managing over US$120 trillion of asset signed the UN PRI. UK pension fund trustees even risked legal actions by not managing climate change-related risks. This implies business corporations with low ESG ratings could hardly obtain funding and face an increased cost of capital.

Risk managers in financial institutions like banks, insurers and reinsurers now have to identify and quantify climate risks such as physical risks and transition risks in their risk assessments.

In short, a wide variety of finance jobs, ranging from fund managers, equity researchers, risk managers, financial regulator, bankers, accountants to auditors, now require some sorts of ESG skill sets.

As ESG is still an emerging trend, there are not yet many ESG experienced hires in the market. An ESG certification, along with a relevant degree or some relevant experience, could likely help you prove your ESG skills and outstand from the pool of candidates in getting a finance job.

Which ESG certification is the best?

Unlike such well-proven qualifications as CFA and FRM, most ESG certifications are rather young. Debate is ongoing — which ESG certification is the best?

1. CFA Institute Certificate in ESG Investing (“CFA ESG”)

2. GARP’s Sustainability and Climate Risk (SCR) Certificate (“GARP SCR”)

3. EFFAS Certified ESG Analyst® (“CESGA”)

4. Fundamentals of Sustainability Accounting (FSA) Credential (“FSA”)

My short answer - If you want a real quick short answer, here you go - These tables summarise key facts of the 4 major ESG certifications, and my opinion and ratings on them (Well, I do separate ‘facts’ and ‘opinion’ lol):

If you want a complete answer, stay with me.

I am going to share my personal experience on obtaining the CFA ESG and GARP SCR certifications, and what I heard from my colleagues/friends who have obtained the CESGA or SASB FSA designation.

Which ESG exam is the most relevant/ useful to a finance job?

The module names in the syllabi may look a bit vague and similar. In fact, each ESG certification has its specialised focus to target at different market segments.

CFA ESG and CESGA exams focus on ESG investing from the perspective of an investment manager, fund manager, equity researcher.GARP SCR emphasises climate risk management from the perspective of a risk manager, credit analyst, auditor or regulator, such as how to measure and model climate risks and conduct scenario.

For my personal experience and study tips on the CFA ESG and GARP SCR exam syllabus based on my personal experience, please refer to this story.

SASB puts its focus on accounting disclosures and ESG reporting from the perspective of an accountant or auditor.Regarding the relevance and usefulness of the exams, it really depends on which finance career track you are looking for/ working in.

Can I print it on my name card after my name as a designation suffix?

CESGA ☑, CFA ESG☒, FSA☒, GARP SCR?

If you really wish to add a designation suffix on your name card (e.g. John Smith, CFA, FRM, CESGA), then the CESGA is your best choice.But, the European organisation EFFAS is not as globally recognised as its peers. CESGA is still a young and developing designation (somewhat like the CAMS a few years ago?) which may take years to gain recognition — you can consider it an early investment, which could grow big, or fail.

While the CFA Institute and SASB have explicitly mentioned the CFA ESG and FSA cannot be used as a designation suffix, the GARP SCR does not give a clear answer. Yet, upon completion, you can have an electronic certificate and display a digital badge on your Linkedin profile, which definitely polish your profile.

Which the ESG exams are the most difficult?

(easy) CESGA = FSB < SCR = CFA ESG (hard)

No worries if you are bad at maths. Their family members CFA, FRM and CPA might make you feel these ESG exams could be very quantitative or require prior knowledge in finance, statistics or accounting. In fact, these ESG exams are about qualitative concepts. You don’t even need a calculator in the exams.

In terms of relative difficulty, in this sample, the less costly an exam is, the more difficult it is…After viewing the study materials of all the 4 exams, I feel CFA ESG and GARP SCR are more difficult. Both require >100 hours of preparation hours.

CFA ESG has the most lengthy studty materials to read, which textbook has over 550 pages of readings which you really have to read, as some questions are very tricky in terms of wordings and concepts. Unlike the infamously low passing rate of its family member, the CFA ESG has a high passing rate at 60%-70%.

Objectively, SCR has the lowest passing rate at 51% among its peers. I think the main reason is that the study materials are formed by readings or papers from various institutions, leading to rough transitions between chapters. Candidates may find this hard to follow.For my personal experience and study tips on CFA ESG and SCR exams, please refer to this story.CESGA has hybrid learning materials (video lectures + brief powerpoint handouts). Some may not be happy with its ~10 hours of video lectures as it’s less convenient to study anytime, anywhere. Unlike its peers, the CESGA has an exam of half MCQs and half open questions on a case study. Still, the content looks relatively easy and the exam has a high passing rate at around 70%.

While the FSA might look scary with a combined 165 MCQs in 4 hours in its 2 levels, it officially only requires 60 preparation hours, and its combined textbooks have even less content than the CFA ESG textbook. It does not disclose its passing rate, but from what I heard it is easier than the CFA ESG and GARP SCR.

Which ESG exams are the cheapest? Can I claim any subsidy?

($)SCR < CFA ESG < SASB FSA < CESGA ($$$$)

GARP SCR is the cheapest, ranging from USD 525 if you are already a FRM charterholder and apply early to USD 750 if you are not a member.

CFA ESG is the 2nd cheapest option at USD 795.SASB FSA has 2 levels which will cost you in total USD900 as a member, or USD 1100 as a non-member.

The European CESGA is the most costly option at EUR1785 incl. VAT (around USD1,940), as it compulsorily bundles the application fee with paid video lectures…

My advice is, check if your company or your local government offers any subsidies to sponsor your ESG exams and which ESG certifications are eligible. For example, Hong Kong has a Pilot GSF Capacity Building Support Scheme which covers CFA ESG, SCR and CESGA (not for FSA) and subsidies 80% exam fees (capped at HK$10k).

Exam timeslot flexibility? What if I urgently need a ESG cert?

(flexible) CFA ESG > SCR > CESGA > SASB FSA (inconvenient)

For CFA ESG, you can book an exam timeslot within 6 months after payment, which is available on every working day via testing centers in-person, or every day via remote-proctored online exam.I really like its flexibility. You can make a booking at a very late stage as timeslots are abundant every day. For my own experience, I reserved an online exam time slot only after I have studied 80% of the syllabus.Considering its simpliest procedures and waiting time, CFA ESG could be theoretically the most efficient to get a ESG cert. But still, bear in mind, the CFA ESG requires the longest preparation hours.

Although the SCR exam must be taken in-person, I still ranked it the 2nd best, since it at least offers more exam time slots.

The CESGA online exams offer very few time slots. It only offers only 2 exam dates (i.e. 17 Mar and 30 Jun) during the whole year of 2023!

FSA has a similar online exam booking system as CFA ESG. But its exam time slots are only open in Jan-Feb, May-Jun, and Sep-Oct. Also, don’t forget you have to do this twice for its 2 levels. So it’s the slowest way that you would look away from if you want an ESG cert quickly.

Conclusion — So, which ESG certificate is the best?

My answer is 👍 CFA ESG = SCR > CESGA > SASB FSA 👎

• CFA and GARP have globally recognised brand names. I can learn something useful and relevant to my job from the study materials. Exam fees are cheaper and my company can fully reimburse the amounts.

• CESGA can get me an easy designation suffix. It’s cool to print another suffix to your name on your name card, right? But, given its high passing rate, I doubt if it can evolve into a well-respected designation. Not to mention it is unreasonably expensive.

• SASB FSA seems the least famous among these ESG certs at this moment. It is not the cheapest though. Despite easy exams, it is troublesome and time consuming to apply for one level after another. And, its syllabus is less relevant to my career.

To you? It depends. You could ask yourself a few questions:

• Which finance career track you are looking for/ working in? (portfolio manager? credit risk analyst? auditor?)

• Which ESG domain you are most interested in? (ESG investing? climate risks? accounting disclosure?)

• Does exam fee matter? (your financial status? the coverage of your company subsidy scheme? any government subsidies?)

• What do you want to show on your CV/ Linkedin Profile/ name card? (another designation suffix on your name card? a Linekdin digital badge from a better recognised organisation?)

• What is your preferred mode of exam (in-person or online? fully MCQs or some open questions?)

• How many preparation hours are you willing to spend?

• How urgent do you need your ESG certificate?