Certified ESG Analysts

Nordic Certified ESG Analysts – Nordea speeding up, Danske Bank still in Pole Position and Norway still lagging!

Lacking ESG competence is an important problem the asset management industry is facing in an environment being harder regulated and where expectations from the asset owners (clients) are increasing fast. The potential cost, through regulatory and reputational risk, of not being able to deal with this correctly, can be quite high.

There are many high level ESG relevant courses you can pick up, and they will take ESG beginners to a more informed level. But we also need formal ESG analyst education in asset management and capital markets, we need professionals that can produce full ESG research reports on investee companies based on a thorough ESG risk understanding, not only simplified and shallow top-down tick off box process (we see too much of this out there today).

A problem is that a lot of practitioners with ESG education are doing other things than portfolio management. And to be able to fully integrate ESG risks that is now mandatory in the EU, formal training is required. Then it does not help to have an ESG person in sales, reporting, compliance or other.

To address this, portfolio managers and investment analysts, need to add ESG to their formal educational base, preferably with certification from an international recognised organisation.

At sustainAX we have had a closer look at where in the Nordics and in what companies we find Certified ESG Analysts (EFFAS). It is the only education of ESG analysts for finance professionals we have found so far requiring a case to be satisfactory solved during the examination to gain the certification and hence the most relevant for assessing individual knowledge of ESG relevant for investing.

We will here present to you what we found among the 224 CESGAs in the Nordics registered on the EFFAS website.

Nordic Certified ESG Analysts overall

Since we did this exercise last time in March this year, not less than 64 new CESGA have appeared in the Nordics. The CESGA is gaining in popularity and the cohorts trying to succeed the exam each quarter is increasing steadily. It is great to see ESG analyst competence spreading around the Nordics.

Certified ESG Analysts per country

On a geographical level Sweden has the most CESGA (93) as last time, but Finland and Denmark are ahead relative to the population size. Finland (64) has taken the largest leap since the last study, passing Denmark (52). Norway is more than doubling from 7 to 16, but it is surprising to see that this is still not really picking up. The difference to Finland and Denmark is striking. To be at the level of the others, we would expect to see Norway around 50. One explanation can be the lagged implementation of the SFDR Level 1 and EU Taxonomy regulation, now expected before the end of the year, as Norway is not an EU member. Thus, the focus on this has been lower? This regulation requires important process changes for asset managers, particularly for ESG risk integration and it is urgent to get this formal competence in place among portfolio managers and analysts.

CESGA per country 2022 08

Certified ESG Analysts per company

Considering this on a company level, Danske Bank CESGAs represent not less than 27% of all CESGA in the Nordics (58 of 211 in total where we could identify the company). The new surprise this time is Nordea with 18% (38) of all. The increase is 31 new for Nordea, and the closest in increase is Danske Bank with 6 new. The most important asset manager with Certified ESG Analysts in Norway is this time Nordea (Danske Bank last time). Relative to their staff size, Ålandsbanken and Fondita also sticks out with not less than 9 and 4 CESGAs! Arctic and OP Financial Group are new on the list with 4 each. They are all part of a group that seem to have understood the importance of bringing up the ESG analyst competence. A key differentiator here is whether the ESG focus is on reporting or investment process. We at sustainAX recommend focusing first on the investment processes and let the reporting follow naturally.

In the following table we have all Nordic companies with 2 or more CESGAs, we have the full list available.

CESGA per company 2022 08

We reached out to the CFA Institute again to get some data on the Nordic holders of the «Certificate in ESG Investing» (only multiple-choice examination, no case), but they still do not wish to share this information with us. If anybody out there can provide us with this information, we would be happy to complete this overview.

In this research we are ignoring the programs not targeting specifically ESG research and/or that we consider too expensive compared to the 1500€ cost of the CESGA.

Here is an interesting article describing the CESGA (also comparing it to the CFA Certificate in Investing): https://300hours.com/cesga-certified-esg-analyst/

Conclusion – ESG Competence gap

Well done to Nordea, you have really taken the challenge to increase ESG competence seriously! And Danske Bank that is still leading comfortably for the total number! For our Norwegian fellows, we would strongly recommend picking up the challenge now!

To close the competence gap on ESG research and ESG risk integration, asset managers need formally Certified ESG Analysts. We recommend all portfolio managers and investment analysts that plan to work in this industry going forward to sign up and start studying. Make sure you choose an appropriate education; recognised and international to ensure common understanding and preferably leading to a certification.

We can help you with the ESG Risk Integration processes and it will be much easier if your portfolio managers and analysts have a higher level of ESG competence as they will be better positioned to understand ESG research and ESG risks.

Let us know what you have done or plan to do to increase ESG competence in your financial company! Maybe you have chosen another way?