100+ Free CFA Sustainable Investing Practice Questions

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An investment manager states that her firm 'systematically incorporates ESG factors into traditional financial analysis to improve risk-adjusted returns.' Which sustainable investing approach is she describing?

Negative screening

ESG integration

Impact investing

Thematic investing

to track

2026 Statistics

Key Facts: CFA Sustainable Investing Exam

100

Multiple-Choice Questions

CFA Institute

2h 20m

Exam Time

CFA Institute

$525

Exam Fee

CFA Institute

~70%

Approx Passing Score

MPS, CFA Institute

100-150 hrs

Recommended Study Time

Candidate reports

Curriculum Chapters

CFA Institute

The CFA Institute Certificate in Sustainable Investing (renamed from CFA UK ESG Investing in 2025) is a 100-question, 2h20m, $525 exam globally recognized as the entry credential for ESG analysts. Curriculum spans 9 chapters from ESG basics to ISSB-aligned reporting, GIPS, IRIS+, and EU SFDR/Taxonomy. Open to anyone, no prerequisites — a fast track into sustainable investment careers.

Sample CFA Sustainable Investing Practice Questions

Try these sample questions to test your CFA Sustainable Investing exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1An investment manager states that her firm 'systematically incorporates ESG factors into traditional financial analysis to improve risk-adjusted returns.' Which sustainable investing approach is she describing?

A.Negative screening

B.ESG integration

C.Impact investing

D.Thematic investing

Explanation: ESG integration is the systematic and explicit inclusion of material ESG factors alongside traditional financial analysis in investment decisions. The CFA Institute defines it as a way to enhance risk-adjusted returns by considering financially material sustainability information without necessarily targeting non-financial outcomes.

2Which of the following best describes the relationship between ESG investing and fiduciary duty under the most widely cited interpretations (e.g., the PRI's 'Fiduciary Duty in the 21st Century' report)?

A.Considering ESG factors typically conflicts with fiduciary duty because it sacrifices returns for values.

B.Failing to consider financially material ESG factors is a failure of fiduciary duty.

C.Fiduciary duty applies only to financial returns and is unrelated to ESG considerations.

D.ESG considerations are permitted only for charitable or non-profit investors.

Explanation: The PRI/UNEP FI 'Fiduciary Duty in the 21st Century' (2019) concluded that failing to incorporate financially material ESG factors is a failure of fiduciary duty. Modern interpretations treat material ESG analysis as part of prudent investment process, not in conflict with it.

3How many Principles for Responsible Investment (PRI) are signatories committed to implementing?

A.Three

B.Six

C.Ten

D.Seventeen

Explanation: The PRI consists of six Principles, including incorporating ESG into investment analysis, being active owners, seeking disclosure from investee companies, promoting acceptance of the Principles, working collaboratively, and reporting on progress.

4An asset owner wants to align reporting with global sustainability development goals adopted by the United Nations in 2015. Which framework would they reference?

A.UN Global Compact (UNGC)

B.Sustainable Development Goals (SDGs)

C.Principles for Responsible Banking (PRB)

D.Task Force on Climate-related Financial Disclosures (TCFD)

Explanation: The 17 UN Sustainable Development Goals (SDGs), adopted in 2015 with a 2030 target horizon, provide a globally agreed framework for development priorities. Many investors use SDG mapping to demonstrate the alignment of capital with broader societal outcomes.

5Which UN initiative includes 10 principles spanning human rights, labor, environment, and anti-corruption that companies voluntarily adopt?

A.UN Sustainable Development Goals

B.UN Global Compact

C.UN Principles for Responsible Investment

D.UN Environment Programme Finance Initiative

Explanation: The UN Global Compact (UNGC) is a voluntary initiative for companies, comprising 10 principles across human rights, labor, environment, and anti-corruption. It is the world's largest corporate sustainability initiative.

6A portfolio manager removes all manufacturers of cluster munitions from her investable universe in compliance with international conventions. Which approach is this?

A.Best-in-class screening

B.Norms-based screening

C.Negative/exclusionary screening

D.Thematic investing

Explanation: Excluding specific products or sectors (such as cluster munitions, anti-personnel mines, or tobacco) on ethical or legal grounds is negative or exclusionary screening. When the exclusion is rooted in international conventions like the Oslo Convention, it is sometimes also termed norms-based, but the mechanic of excluding companies based on their products is most precisely classified here as negative screening.

7Which statement most accurately distinguishes 'impact investing' from 'ESG integration'?

A.Impact investing requires only an ESG screen, while ESG integration requires positive impact measurement.

B.Impact investing requires the explicit intention to generate measurable positive impact alongside financial return; ESG integration does not require an impact intention.

C.Impact investing is restricted to private markets; ESG integration is restricted to public markets.

D.Impact investing always sacrifices financial return; ESG integration always enhances return.

Explanation: Per the GIIN definition, impact investing requires intentionality, contribution, and measurement of positive social/environmental outcomes alongside financial returns. ESG integration incorporates material ESG factors into financial analysis but does not require an explicit impact objective or measurement.

8The phrase 'double materiality' as used in EU sustainability reporting (CSRD/ESRS) refers to which two dimensions?

A.Financial materiality and impact materiality

B.Short-term materiality and long-term materiality

C.Quantitative materiality and qualitative materiality

D.Sector materiality and entity materiality

Explanation: Double materiality combines (1) financial materiality — how sustainability matters affect the company's enterprise value — and (2) impact materiality — how the company affects people and the environment. The CSRD/ESRS regime in the EU explicitly requires both perspectives.

9Within the EU Sustainable Finance Disclosure Regulation (SFDR), an Article 9 fund is one that:

A.Does not consider sustainability risks at all.

B.Promotes environmental or social characteristics among other characteristics.

C.Has sustainable investment as its objective.

D.Is exempt from sustainability disclosures because of its size.

Explanation: Under SFDR, Article 9 funds have sustainable investment (as defined in Article 2(17)) as their stated objective. Article 8 funds 'promote' E/S characteristics, while Article 6 funds disclose how they integrate sustainability risks but make no E/S claims.

10A market participant criticizes ESG ratings for showing low cross-provider correlation. Which of the following is the most commonly cited driver of this divergence according to academic studies (e.g., Berg, Koelbel, and Rigobon, 2022)?

A.Rating providers using identical methodologies but different time periods

B.Differences in scope, measurement, and weights across rating providers

C.Mandatory disclosure rules that force standardization across providers

D.Identical underlying data but different statistical software

Explanation: Berg, Koelbel, and Rigobon (2022) attribute ESG ratings divergence primarily to differences in scope (which categories are included), measurement (which indicators are used for each category), and weights (how categories are aggregated). Scope and measurement together explain most of the divergence.

About the CFA Sustainable Investing Exam

Free CFA Institute Certificate in Sustainable Investing practice questions covering ESG integration, climate, stewardship, ISSB, SFDR, GIPS, and IRIS+.

Questions

100 scored questions

Time Limit

2 hours 20 minutes

Passing Score

Approx. 70% (MPS set by CFA Institute)

Exam Fee

$525 (CFA Institute)

CFA Sustainable Investing Exam Content Outline

~10%

Introduction to ESG Investing & The ESG Market

Definitions, frameworks (PRI, UNGC, SDGs), market structure, regulation

~30%

Environmental, Social & Governance Factors

Climate, biodiversity, water, human capital, DEI, board structure, anti-corruption

~30%

Engagement, Stewardship, ESG Analysis & Integration

Active ownership, voting, security analysis, valuation, due diligence

~30%

Mandates, Portfolio Construction, Performance & Reporting

Strategies, benchmarks, GIPS, ISSB, GRI, SASB, IRIS+, assurance

How to Pass the CFA Sustainable Investing Exam

What You Need to Know

Passing score: Approx. 70% (MPS set by CFA Institute)
Exam length: 100 questions
Time limit: 2 hours 20 minutes
Exam fee: $525

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

CFA Sustainable Investing Study Tips from Top Performers

1Master the official frameworks: PRI 6 Principles, UNGC 10 Principles, SDGs, TCFD, IFRS S1/S2 (ISSB), CSRD/ESRS, EU Taxonomy, EU SFDR Articles 6/8/9, ICMA Bond Principles, GIPS, IRIS+

2Distinguish ESG integration vs negative screening vs thematic vs impact investing — questions test these definitions repeatedly

3Practice valuation adjustments (DCF inputs, credit spreads, discount rates) for material ESG factors

4Memorize Scope 1/2/3 boundaries and the difference between WACI, carbon footprint, and absolute emissions

5Drill EU regulation: SFDR Articles 6/8/9, PAB vs CTB benchmarks, CSRD double materiality, EU Taxonomy DNSH and minimum safeguards

6Take at least three full-length 100-question timed mock exams; aim for 75-80% before booking

Frequently Asked Questions

What is the CFA Institute Certificate in Sustainable Investing?

The CFA Institute Certificate in Sustainable Investing is a globally recognized credential covering ESG integration, sustainability factors, stewardship, portfolio construction, and reporting. It was previously known as the CFA UK ESG Investing Certificate and was renamed and integrated into the CFA Institute lineup in 2025. The exam is 100 multiple-choice questions over 2 hours 20 minutes.

How much does the CFA Sustainable Investing exam cost?

The exam fee is approximately $525 (USD), which includes access to the official curriculum and learning outcome statements, plus one scheduling window. Pricing is set by CFA Institute and may vary slightly by region; check the official CFA Institute website for the latest fees.

How long should I study for the CFA Sustainable Investing exam?

Most candidates report 100-150 hours of study over 3-6 months. Time required depends on your existing finance and ESG background. Plan to cover all nine chapters of the curriculum, work through 500+ practice questions, and finish with full-length timed mocks scoring 75%+ before booking your exam.

What topics are covered in the CFA Sustainable Investing exam?

The curriculum has nine chapters: introduction to ESG investing; the ESG market; environmental factors (climate, biodiversity, water, circular economy); social factors (human capital, DEI, communities); governance factors (board, executive comp, audit, shareholder rights); engagement and stewardship; ESG analysis, valuation and integration; investment mandates and portfolio construction; and investment performance, reporting and verification.

Is the CFA Sustainable Investing certificate recognized internationally?

Yes. With CFA Institute branding from 2025, the certificate has expanded global recognition for ESG and sustainable investing roles. It is widely cited by asset managers, asset owners, and consultants. Test centers (Prometric) and online proctored delivery make it accessible from most countries.

Do I need a CFA charter to take this exam?

No. The Certificate in Sustainable Investing is open to anyone — no prerequisites, sponsor, or prior CFA exam is required. It is a popular standalone credential for analysts, advisors, and stewardship professionals, and complements the broader CFA Program for those pursuing ESG careers.

How is the exam scored?

The exam is scored against a Minimum Passing Score (MPS) set by CFA Institute, generally interpreted as roughly 70% of items correct. CFA Institute does not publish a fixed pass rate or cut score. Aim to consistently score 80%+ on full-length practice tests before sitting the exam.