One of the key lessons of the COVID-19 pandemic so far is that we must react swiftly to high probability, high impact risks — and delays are costly.
The climate is changing. And the risks from climate change are only going to rise over the foreseeable future. As climate risk management continues to develop towards being a discrete job title, managing climate risks will be an integral component of a holistic risk management approach for all industries globally.
Here’s where GARP’s new Sustainability & Climate Risk (SCR) certification comes in – check out our comprehensive guide to learn more!
Overview of the Sustainability & Climate Risk (SCR) Certification
Launched in January 2020 by Global Association of Risk Professionals (GARP) – which also runs the FRM program – SCR is a global climate risk management program designed to help professionals understand the effect of climate change on organizations and how to manage that risk. It is created in response to growing demand for financial and non-financial firms alike to incorporate sustainability standards in their operations, primarily driven by climate change.
The SCR course is great for professionals who are looking to add climate risk management to their skillsets – not just for those working in finance but also in other disciplines such as supply chain management, operations and technology. And it isn’t just for those professionals early in their career either, GARP expects to see meaningful demand for the SCR coming from the more senior ranks as well.
The course consists of 6 modules, covering policy and regulation; green and sustainable finance; the science, effects and measurement of climate-related risks; scenario analysis; and emerging issues such as health effects and geopolitical impacts.
With registration opened on 1st May 2020 for the first SCR exam in September, GARP reported that there are already candidates from more than 60 countries globally, coming from a myriad of industries, company types and stages of career – all reflecting the relevance of climate change risks across geographies, industries and career level.
SCR Certificate In A Nutshell
The SCR certification is designed to equip professionals with the understanding on how to manage the potential economic and operational impacts of a changing climate on their organizations. The impact of climate change is vast, and certainly not limited to just finance, but other disciplines such as supply chain management, technology and operations.
The SCR exam consists of a one-part, computer-based testing exam consisting of 80 questions in 3 hours. The exam is not highly quantitative and designed to be accessible to a wide audience.
In terms of study hours, it is recommended that SCR exam candidates devote around 100-130 study hours in total to complete the qualification
The SCR exam can be taken in specific 2-week windows at Pearson Vue test centers internationally.
In terms of pass criteria, the questions are equally weighted and there are no negative markings for incorrect answers. There are no pre-determined pass/fail rates for the SCR Exams, with the passing score determined by SCR Advisory Committee.
As it is a new qualification with its first exam conducted in September 2020, there are no specific timelines on when or how long it takes for exam results to be released, but we expect it to be similar to FRM‘s 6 weeks timing, since it is also administered by GARP.
Pass Rates & Pass Marks
Registration has just opened in May 2020 for the new SCR certificate, with the first exam window in September 2020.
While there are no pass rates data as yet, GARP has confirmed that cut-off scores will be determined through an industry best-practice methodology under the oversight of the SCR Advisory Committee. The expectation is that “properly prepared” candidates should fare well on the exam.
That said, the SCR exam is not highly quantitative, as it is designed to be accessible to a wide audience.
Topic Areas & Weightings
The Sustainability & Climate Risk Certificate does a great job in covering a breadth of topics in 6 modules that provides a holistic overview of the effective assessment and management of climate risks.
The topics areas, in-depth description and exam weights are as below:
|Sustainability & Climate Risk Certificate Topics||Description||Topic Weights|
|Foundations of Climate Change: Science and Global Response||This chapter focuses on the|
foundational concepts of climate change, including the underlying science and global responses.
|Policy, Regulations, and Implications||The chapter is all about the responses of financial institutions, regulators, and international bodies to emerging climate risks.||20%|
|Green and Sustainable Finance: Instruments and Markets||This module looks into the emergence of financial sector tools and markets born out of the global response to climate change.||15%|
|Climate Risk Measurement and Management||The area of focus here is the risks from climate change and how do we measure and manage these risks.||20%|
|Climate Scenario Analysis||The chapter explains the development and application of climate scenario analysis, the types of scenarios that exist, and what information they can provide.||15%|
|Current Issues in Sustainability and Climate Risk||This module shares the latest issues that are increasingly becoming part of the sustainability and climate risk landscape.||10%|
SCR exam fees vary depending on:
- your membership status with Global Association of Risk Professionals (GARP);
- whether you have other GARP certifications such as Financial Risk Manager (FRM) or Energy Risk Professional (ERP);
- whether you’re a new or returning candidate.
|Fees, US$||SCR Certificate|
|Exam Fees||– For non-GARP members: $650 for Early registration, $750 for Standard registration|
– For GARP members (Individual member): $550 for Early registration, $650 for Standard registration. Bear in mind that Individual membership costs $195 per year
– For candidates who are Certified FRM / ERP: $525 for Early registration, $625 for Standard registration
|For retakes within next 2 exam windows (12 months): $350|
Otherwise, full exam fee applies for retakes after 12 months. If the curriculum changes before the candidate retakes the SCR exam, an updated electronic version of the curriculum will be made available to the candidate free of charge.
SCR Exam Dates
SCR exams are conducted via an in-person computer-based testing (CBT) exam at Pearson Vue centers globally.
SCR exams are held twice a year in April and October with the following key registration deadlines:
|SCR Exam Dates and Deadlines||April 2021||October 2021|
|Registration opens||1 Dec 2020||1 May 2021|
|Early registration deadline||31 Jan 2021||30 Jun 2021 (TBC)|
|Standard registration deadline||31 Mar 2021||31 Aug 2021 (TBC)|
|Exam Window||17-25 Apr 2021||23-31 Oct 2021|
Once registered, you can schedule an in-person CBT Exam at a Pearson VUE test center. SCR candidates must schedule an exam at least 48 hours prior to their desired exam start time, only for the exam window they’re registered for. The in-person CBT exams slots are on a first-come, first-served basis. Candidates who do not schedule an exam by the deadline must re-register and pay the applicable fees.
What Are the Requirements for SCR Certification?
Just like the Certificate in ESG Investing, there are no work experience or prior qualifications required to sit for the SCR exam.
Candidates who successfully pass the SCR exam can claim a digital badge and an electronic certificate from GARP.
Benefits of the SCR Certification
Having the SCR Certificate could be a key differentiator in the risk management sector, which could be helpful if you’re job hunting during this COVID-19 pandemic.
Similar to the Certificate in ESG Investing in terms of cost and time required, it does seem to be a cost effective investment for risk professionals to upgrade their skillset with climate risk management credentials.
By completing and earning the Sustainability & Climate Risk Certificate, you can expect to:
- Apply principles of sustainability and climate risk management in current and future roles;
- Improve your career prospects and increase your competitive advantage;
- Demonstrate the knowledge and tools necessary to assess and manage the sustainability and climate risk challenges many industries face.
- Gain a globally recognized qualification (and digital badge) from GARP
- Pave your way for further finance designation such as FRM, CFA, or CAIA as you further specialize.
SCR vs. Certificate in ESG Investing: Which Is Right for You?
In short, while both qualifications focus on sustainable investing, there are some slight differences in focus about them:
- Sustainability & Climate Risk (SCR) certificate mainly focuses on educating professionals on how to manage the main environmental risk (arguably just the “E” part of ESG), i.e. climate change.
- On the other hand, Certificate in ESG Investing has a slightly broader focus on ESG factors, and how the investment industry can adapt to that change in investor preferences. That said, it also covers a section on climate change (including climate mitigation, and adaptation and resilience) and a range of climate change initiatives.
Both SCR and ESG Investing Certificate (via remote/online proctoring) are available globally. CFA UK is actively expanding the reach of its ESG Investing qualification to other countries around the world, so it is likely a matter of time that it is available worldwide as well for in-person exams.
While both are good quality qualifications from reputable organizations, the choice depends on which certificate has more relevance to your preferred career path: investments or risk management.
|GARP’s Sustainability & Climate Risk (SCR)||CFA UK’s ESG Investing|
|Suitable for||Risk management professionals of all disciplines (finance, supply chain, operations, technology etc) who are keen to learn about sustainability and how to manage climate risk in their industries.Students interested in a risk management career.||Students who are keen on an investment career; orInvestment professionals of all roles (asset management, sales & distribution, wealth management, product development, financial advice, consulting, risk etc), who are looking to understand and integrate ESG issues into the investment process|
|Pre-exam qualifications||None||None, although some insights in the investment process is strongly recommended (via formal qualification or experience)|
|Number of Exams||1||1|
|Exam Frequency||2 exam cycles a year (Apr, Oct) with 1 week exam window each||Available to book throughout the year (except weekends and holidays)|
Also available to book for remote/online proctoring globally throughout the year.
Maximum 4 attempts in 4 months
|Exam Format||80 multiple-choice questions in 3 hours|
In-person computer-based testing only
|100 multiple-choice and item set questions in 2 hours and 20 minutes|
On-site computer-based testing and remote testing
|Pass Rates||Data not available yet as first SCR exams start on Sep 2020||Between 60%-75%|
|Fees and Costs||Around US$ 525-650 depending on GARP membership status or presence of other credentials||GBP £470 (around US$ 570)|
|Study Hours Needed||100-130 hours||130 hours|
|Post Exam Requirements||None, although there are 20 hours of voluntary continuous professional development (CPD) every 2 years||None|
Overall, the SCR certificate seems to be a cost efficient means of augmenting and signalling your climate risk management knowledge in an increasingly competitive marketplace.
If you are in risk management, regardless of industry or discipline (finance, supply chain, operations, technology etc), the SCR certificate could prove useful in broadening your skillset as climate change issues are brought to the forefront of every company’s agenda. If you’re a student keen to start a career in risk management of any industry, the SCR certificate can be a valuable differentiator.
Is the SCR Certificate something you’d consider taking on to enhance your job prospects? Let us know in the comments below!
Meanwhile, you may find these related articles in our Beginner’s Guide series of interest:
- Certificate in ESG Investing: A Beginner’s Guide
- CFA Exams in 2021: A Beginnger’s Guide
- IMC (Investment Management Certificate): A Beginner’s Guide
- CFA Investments Foundation: A Beginner’s Guide
- CAIA (Chartered Alternative Investment Analyst): A Beginner’s Guide
- FRM (Financial Risk Manager): A Beginner’s Guide