CFA Institute Sustainable Investing Certificate (formerly Certificate in ESG Investing)

International · CFA Institute · professional

132practice questions written to this syllabus
7subjects

Format

Self-study with a 6-month access period and one exam taken in person or online; about 100+ hours of study recommended. Question count and duration were not on the page read.

Sections

Over the years

The official programme page was read: the credential is now called the Sustainable Investing Certificate, foundational level, USD 890, no strict prerequisites. Section list is from general knowledge of the curriculum.

Official source: https://www.cfainstitute.org/programs/sustainable-investing-certificate

Subjects this exam draws on

Climate System Science18 questionsClimate Models, Scenarios & Downscaling16 questionsClimate Change Impacts on Agriculture & Food Systems5 questionsCarbon Markets, Offsets & Payments for Ecosystem Services3 questionsSustainability Reporting & ESG Disclosure55 questionsSustainable Agri-food Supply Chains & Deforestation-free Sourcing3 questionsClimate Finance, Climate Risk & Sustainable Investment32 questions

Five practice questions, worked

Original questions written to this exam's published syllabus and pattern. Not past papers.

1. AR6 assessed the Earth's energy imbalance for 2006–2018. Which statement correctly describes it and where the extra energy has gone?

  1. About 0.8 W m⁻², with roughly 60 per cent going into melting ice and the rest into the ocean
  2. About 8 W m⁻², with roughly 91 per cent of the accumulated energy going into the atmosphere
  3. About 2.7 W m⁻², equal to the total human forcing, with most going into warming the land
  4. About 0.8 W m⁻², with roughly 91 per cent of the accumulated energy going into the ocean
Answer and working

D. About 0.8 W m⁻², with roughly 91 per cent of the accumulated energy going into the ocean

AR6 gives 0.79 W m⁻² for 2006–2018, with ~91% of the energy in the ocean, ~5% land, ~3% ice and ~1% atmosphere. The imbalance is smaller than the forcing (2.72 W m⁻²) because the climate has already warmed and radiates part of the forcing away.

Climate System Science · The natural greenhouse effect and the energy budget

2. Why does AR6 present many regional projections by global warming level, such as 2 °C, rather than only by scenario and year?

  1. It makes all regional changes identical, so one map suits every region
  2. It is required because no scenario reaches more than 2 °C of warming
  3. It allows regional results to ignore greenhouse gas concentrations entirely
  4. It limits the effect of differing sensitivities and ties change to targets
Answer and working

D. It limits the effect of differing sensitivities and ties change to targets

Expressing change at a warming level groups model results by how much each has warmed, reducing the spread caused by different sensitivities and relating directly to targets. Concentrations still matter, regional changes differ, and several scenarios exceed 2 °C.

Climate Models, Scenarios & Downscaling · CMIP ensembles and model evaluation

3. Why are simultaneous harvest failures in several major breadbaskets treated as a systemic risk for global food supply?

  1. Breadbaskets share one irrigation system, so a single canal failure stops production in all of them
  2. World prices are fixed by treaty, so supply shortfalls never reach consumers in importing countries
  3. Each breadbasket grows a different crop, so a failure in one is always offset by surplus in the others
  4. Patterns such as ENSO link them, and joint shortfalls overwhelm trade and stocks
Answer and working

D. Patterns such as ENSO link them, and joint shortfalls overwhelm trade and stocks

Teleconnections such as ENSO can cause correlated shocks across regions; when several exporters fail together, stocks and trade cannot buffer the loss and prices spike. Breadbaskets do not offset each other automatically, prices are not fixed by treaty, and they share no single irrigation system.

Climate Change Impacts on Agriculture & Food Systems · Pathways of climate impact on food systems

4. A company sets an internal 'shadow' carbon price for investment appraisal. What does this do?

  1. Charges each business unit a real fee per tonne, which the national tax authority then collects as a levy
  2. Adds a notional cost per tonne to project cash flows so that high-emitting options look less attractive
  3. Creates allowances that the company can sell on the national ETS when its projects cut emissions
  4. Fixes the company's emissions at a cap, beyond which no new projects may be approved for any reason
Answer and working

B. Adds a notional cost per tonne to project cash flows so that high-emitting options look less attractive

A shadow price is a notional cost used in appraisal; no money changes hands. An internal fee is a different design (real transfers within the company, not to a tax authority); neither creates ETS allowances or a hard cap.

Carbon Markets, Offsets & Payments for Ecosystem Services · Carbon pricing instruments: taxes and emission trading schemes

5. At which event was the creation of the International Sustainability Standards Board announced?

  1. The Rio Earth Summit, Brazil, June 1992
  2. The Paris climate conference, December 2015
  3. COP26 in Glasgow, November 2021
  4. The World Economic Forum in Davos, January 2010
Answer and working

C. COP26 in Glasgow, November 2021

The IFRS Foundation announced the ISSB at COP26 in November 2021, together with the consolidation of CDSB and the Value Reporting Foundation. The other events predate it.

Sustainability Reporting & ESG Disclosure · Purpose and history of sustainability reporting

Practise it, and prove it

These notes are free to read here, with no account.

What the Laisha app adds:

Free for ten days, then a subscription. We would rather write that here than have you find it later.

Open Laisha →