For the learner

• A repeatable method for judging financial materiality at the company level. Built by applying the SASB five-factor framework to worked company cases, so the judgement is structured rather than intuitive.

• The ability to compare a company against its peers on a defensible, normalised basis. Developed through hands-on data normalisation and distribution analysis, including how to handle outliers and non-normal data.

• A structured technique for translating a sustainability metric into a valuation adjustment. Practised on a live valuation exercise (DCF and beyond), so participants leave able to do it, not just recognise it.

• Exam readiness for FSA Level II. The taught sequence follows the Level II curriculum and closes with targeted exam orientation mapped to the official learning objectives.

For the organisation

• In-house capability to interpret sustainability data, reducing dependence on third-party ESG ratings whose methodologies the firm cannot inspect or defend.

• A common analytical language across reporting and investment functions, useful where both sit under shared sustainability or finance leadership — the same standards-based method serves disclosure quality and capital decisions.

• Team who can defend materiality and valuation judgements to auditors, investment committees, and regulators with a documented, standards-based rationale.

Prerequisites (mandatory)

1. FSA Level I completed or equivalent knowledge. The course assumes familiarity with SASB standards and basic sustainability materiality concepts.

2. Pre-reading: Study Guide Chapters 1–2. Participants must read before Day 1:

• Chapter 1: How a Company's Circumstances Influence Material Sustainability Issues (industry profile, internal/external factors, governance influence)

• Chapter 2: Understanding Sustainability Issues (the universe of sustainability issues, interrelated impacts)

Day 1 — What matters, and how to compare it

Purpose: Equip participants to build the skill of evaluating which sustainability issues are financially material to a specific company, and produce a normalised, distribution-aware peer comparison that can be defended.

1. Quick recap of Chapter 1 and 2

2. Evaluating sustainability issues

• Applying the five factors to evaluate how a specific sustainability issue affects a given company 

• Contextualising sustainability topics 

• Making use of the findings 

• Practice drill: participants apply the five-factor framework to a provided company profile and issue, work individually, then discuss as a group — what the five factors produce, where judgement is required, and where reasonable evaluators diverge

3. Normalising ESG data for comparison

• When to normalise ESG data, and when not to

• Selecting appropriate denominators and measures for normalisation, and the trade-offs between them

• Normalising for comparative analysis across peers and over time

• Common normalisation errors and how to identify them in data you did not produce

4. Analysing the spread of industry performance, and company context

• Getting to know your ESG data before analysing it: range, central tendency, missing values

• Analysing data distribution and what the shape tells you

• Handling outliers and non-normal distributions — when to exclude, when to investigate, when the outlier is the finding

• Assessing data quality and its limits on interpretation

• Reintroducing operating environment and governance decisions: why two companies at the same normalised position may not be equivalent

5. Applied Exercise — Normalisation and peer positioning

Working in pairs or small groups, participants receive a set of raw peer ESG metrics from a provided dataset. They:

• Select and justify a normalisation approach, documenting the rationale for the denominator choice

• Normalise the dataset and plot the peer distribution

• Position a target company within the distribution and interpret what the position means in context of the company's operating environment

Day 1 Outcome: Participants can evaluate the financial materiality of sustainability issues for a specific company, produce a normalised and distribution-aware peer comparison, and defend their interpretation.

Day 2 — How it hits valuation

Purpose: Build practitioner-level capability to connect sustainability performance to financial impact and translate it into valuation model adjustments, then prepare participants for the FSA Level II exam.

6. Characterising financial impact

• Identifying sustainability-related risks and opportunities: distinguishing transition risk, physical risk, and liability exposure

• Assessing the likelihood, timing, and magnitude of impacts — and why all three matter independently

• A process for identifying metric types and categories — mapping from the SASB metric to the type of financial impact it is designed to illuminate

7. Using sustainability data in financial valuation

• Overview of discounted cash flow as the integration point: which inputs sustainability performance can affect and at what stage

• Identifying channels of financial impact: revenues and expenses (volume, price, cost), assets and liabilities (write-downs, stranded assets, legal exposure), and cost of capital (risk premium, access to capital)

• Evaluating the connection between a company's performance on a specific SASB metric and its most plausible financial channel

• Worked examples: two or three metrics traced through to a specific DCF line item, with the reasoning chain made explicit

8. Integrating ESG beyond DCF

• Evaluating returns and profitability through a sustainability lens: ROIC, margins, and how sustainability performance shows up in efficiency and capital discipline metrics

• What scenario analysis: its role in planning versus in valuation

• ISSB S2 scenario requirements as context, and how FSA Level II's use of scenario analysis connects to and differs from the S2 disclosure requirement

• Climate scenario families as inputs — how a 1.5°C versus 2°C world changes the assumptions feeding a valuation

• Translating scenario outputs into the specific adjustments a model requires, and documenting assumptions explicitly

9. Applied Exercise — Valuation translation (with peer review and challenge)

Working individually or in pairs, participants receive a company profile and its performance on two sustainability metrics — one with a clear DCF channel, one requiring a beyond-DCF approach. 

They:

• Identify the financial impact type and channel for each metric

• Translate the company's performance into specific, documented adjustments to a provided valuation model

• Assess how the adjustments change under one alternative scenario assumption

10. Exam orientation

• How the Level II curriculum maps to the ten official learning objectives

• What each LO verb actually requires in an exam context: EVALUATE versus DIFFERENTIATE versus TRANSLATE are not interchangeable

• Approach to application- and scenario-style questions: reading the question for the LO, structuring the answer, avoiding over-narration

• Common errors under exam conditions and a structured method for working through unfamiliar cases

• Guided practice on a short set of representative questions, with facilitated review

11. Wrap up & Q&A

Day 2 Outcome: Participants can connect a sustainability metric to its financial channel, translate performance into valuation adjustments across DCF and beyond-DCF approaches, and have their reasoning tested under peer challenge — oriented for the FSA Level II exam with all curriculum comprehension checks completed.