What I learned from my ESG Investing Certificate program.

June 11, 2023

In May 2023, I officially earned the CFA Institute Certificate in ESG Investing. The Certificate in Economic, Social, and Governance (ESG) Investing is the first of its kind to educate and support investment professionals so that they can lead the industry in prioritizing sustainability, ethical practices, and social responsibility and to better meet the needs and desires of our clients.

I chose this particular program because it encompasses the experiences and regulations of the US as well as other relevant countries around the globe. I wanted to see the big picture and how we fit into it. Additionally, the CFA Institute is a leader in the education of financial professionals. Since its establishment in 1947, the CFA Institute has developed highly educated, ethical professionals who pledge to prioritize their clients' interests. 

I was attracted to this program because the group is well-regarded in the ESG space. I wanted to gain a deeper understanding of this subject and was pleased to find this program offered what I was looking for. I wanted to understand the science and trends and not solely review opinion-based information. It is also important to be able to address concerns over potential ESG product greenwashing. This is especially true due to the high demand from investors for products and wealth management services that take sustainable investing into account.

Throughout the program, I studied each of the economic, social, and governance areas that make up ESG in detail. We had the opportunity to dig into the underlying issues that constitute each area. Some examples of these underlying issues include the climate, waste materials, our oceans, fair labor practices, and equitable pay. This program taught me different ways to analyze how ESG factors may affect industry and company performance, and security valuation across a range of asset classes. Additionally, we studied the construction and management of ESG-integrated portfolios. 

At its current state of maturity, ESG investing is like the Wild West. This is because there is a lack of standardization of criteria or regulation on what qualifies as good ESG investing. Some argue that additional requirements related to ESG could harm businesses and distract them from their focus on profitability. For these reasons, not everyone is convinced that ESG investing is a worthwhile framework for making investment decisions. I can understand both sides of this issue. 

We offer ESG investing models and use these and other principles because our clients care about improving the world. We believe there is a way to grow wealth and, at the same time, leverage that wealth for good. ESG investing is just one of the tools in our toolbox to help us do that.

ESG investing options in their current form may only be appropriate for some. Depending on your time horizon, commitment, and financial ability, we offer a wide range of available investments, from broadly diversified, best-in-class, to thematic (non-diversified, more targeted, and more volatile). We work with each client individually to discover the investment approach that is best for them.

My journey through the ESG Investing Certificate program has been a worthwhile experience. It has deepened my understanding of sustainable investing and equipped me with more knowledge and tools to positively impact the world through our investment decisions. I am excited about the opportunities it brings to align with our client's financial goals, values, and ability to contribute to a more sustainable and equitable future.

Resources we use include the CFA Institute, Morningstar Sustainalytics, MSCI, As You Sow, Your Stake, and Dimensional Fund Advisors.