Which of the following tests defines the internal theoretical cost on carbon emissions to guide a company's decision-making process in energy-intensive sectors?
The World Bank's World Governance Indicators dataset includes rankings on:
With respect to ESG reporting:
When tailoring an ESG investment approach to client needs, the primary driver of ESG investment for general insurers is most likely:
The rules that can be used to construct ESG exchange-traded funds (ETFs) include:
When an external auditor’s performance materiality level is 60% of its overall materiality threshold, the auditor most likely:
Flooding, droughts, and storms are examples of severe weather events arising from:
According to the consulting firm McKinsey & Company, which of the following is a dimension of sustainable investing applied by fund managers?
Which of the following countries have a joint audit requirement that all public interest entities must engage at least two independent accounting firms to perform an annual audit?
According to the United Nations Principles for Responsible Investment (PRI), modern fiduciary duty would require investment managers to:
Which of the following is best described as a form of engagement that requires institutions to have a formal agreement with concrete objectives and agreed steps?
In the revised 2020 version of the UK Stewardship Code, a significant change is that signatories are now required to:
Which of the following would most likely be the initial step when drafting a client’s investment mandate?
Which of the following is a challenge of integrating ESG analysis into investment processes?
A company's external auditor formally reports to the:
Which of the following ESG factors has the clearest link to corporate financial performance?
Excluding tobacco from the investment universe is an example of which of the following ESG screening approaches?
A portfolio manager of an ESG fund attempting to outperform the general market is most likely to:
With respect to infrastructure assets, externalities are best described as issues that may be:
The mechanism of dual-class shares most likely favors:
The LEAP assessment framework developed by the Taskforce on Nature-Related Financial Disclosure (TNFD) stands for:
An advantage of the carbon footprinting approach to environmental risk analysis is that it allows for:
For private equity investments, an especially important ESG factor is:
A company’s exposure to social trends and factors:
A common characteristic of the EU Paris-Aligned Benchmarks and the EU Climate Transition Benchmarks is that they both:
The UK's Green Finance Strategy identifies the policy lever of greening finance as:
Applying constraints in ESG portfolio optimization:
Will including additional ESG constraints in a portfolio optimization model most likely affect tracking error?
One of the goals of climate change mitigation is to:
According to Greenhouse Gas (GHG) Protocol Standards, the emissions associated with suppliers and consumers are classified as:
Which of the following private equity investors is most susceptible to allegations of greenwashing? An investor that views ESG integration as a way of:
In which of the following countries does the governance code require at least two independent non-executive directors?
Which of the following best describes an Earth system that will exhibit large-scale and long-term changes when reaching critical levels of global warming?
Which of the following is most likely an example of quantitative ESG analysis?
When considering strategic asset allocation, would stranded asset risk most likely be a similar concern for fixed income and equity investors?
A potential challenge for an asset owner implementing responsible investment is:
Which of the following social trends is more relevant to developed markets than emerging markets?
Compared to developed markets, a challenge of ESG investing in emerging markets is less:
Which of the following statements is most accurate? Assessments of the level of ESG capabilities of different fund managers:
Elements of ESG integration include adjusting:
Which of the following statements is most accurate? The Kyoto Protocol was created to:
Which of the following is most likely a consequence of income inequality?
Index-based ESG strategies are typically optimized to:
Which of the following data are most likely the easiest to optimize in a portfolio?
Which of the following ESG approaches is an investor in sovereign debt most likely to apply?
In the context of effective corporate governance, the use of alternative performance metrics (APMs) most directly raises questions about:
According to the Taskforce on Nature-Related Financial Disclosures (TNFD), which of the following drivers of nature change can directly translate into a positive impact on circular economy principles?
A company has an audit contract with one Big Four firm and non-audit contracts with two other Big Four firms. Which scenario is most likely to materialize when the company rotates its auditors?
Which of the following statements about social trends is most accurate?
In addition to reporting on sustainability matters that are financially material to a company's business value, double materiality also requires the company to report the impact of:
Which of the following are most likely to raise the risks of greenwashing by private equity investors? Investors that integrate ESG factors for the purposes of:
Within fixed income, ESG integration is most developed in:
According to a study by Berg, Koelbel, and Rigobon, the correlation of ESG ratings is:
Which of the following is most likely an effect of an aging population?
The European Union (EU)'s Carbon Border Adjustment Mechanism is best described as a(n):
For sovereign debt, the predominant approach to ESG investing is most likely:
Compared to those of other countries, the UK corporate governance code has a more in-depth focus on:
Offshoring is best categorized under which of the following social megatrends?
The main growth driver of greenhouse gas (GHG) emissions is:
A company's reporting and transparency are initially led by its:
Which of the following actors most likely engage with investee companies to improve their ESG performance?
Brown divestment:
The offering of indexes and passive funds with ESG integration by asset managers
Which of the following asset classes has the lowest degree of ESG integration?
According to Mercer Consulting, which of the following asset classes has the highest availability of sustainability-themed strategies compared to its asset-class universe?
The United Nations Sustainable Development Goals (SDGs) are particularly aimed at
Which of the following is most likely a reason for concern regarding the quality of a company's ESG disclosures?
low risk exposure to this factor in the short run
In ESG integration, which of the following best describes a data-mformed analytical opinion designed to support investment decision-making?
The Cadbury Commission proposed that:
Which of the following factors is most relevant to the performance outlook of a military equipment manufacturer?
When assessing credit and ESG ratings, which of the following statements is most accurate?
Which of the following is most likely an example of a negative externality?
According to the Capitals Coalition, the stock of renewable and non-renewable natural resources that combine to yield a flow of benefits to people is best described as
The investor initiative FAIRR focuses on screening out companies
According to the Taskforce on Nature-related Financial Disclosures (TNFD), the four realms of nature include
When searching for an asset manager with an ESG approach, in the request for proposal (RFP) an institutional asset owner would most appropriately ask:
Which of the following statements about corporate governance is most accurate? Companies with a more diverse board of directors are most likely associated with
Which of the following is most likely the primary driver of ESG investment for a life insurer?
Which of the following increases pressure on natural resources?
Integrating the impact of material ESG factors into traditional financial analysis for a company with strong ESG practices most likely.
With respect to ESG engagement for a company that is a going concern, the interests of equity investors and debt investors are most likely.
Which of the following would credit rating agencies (CRAs) most likely focus on in order to test how ESG factors affect an issuer’s ability to convert assets into cash?
According to the Active Ownership study, which of the following statements regarding ESG engagement is most accurate?
A portfolio manager may need to adopt a more appropriate ESG benchmark rather than a broad market benchmark if the degree of exclusions results in:
Excluding investment in companies with a history of labor infractions is best categorized as a(n):
Which of the following is an environmental megatrend that has a severe social impact?
An ESG scorecard for sovereign debt issuers has the following information:
Country 1No carbon policy and high corruption risk
Country 2High-level carbon policy and low corruption risk
Country 3Detailed carbon policy and low corruption risk
Based only on this information, the country with the lowest ESG risk is:
In France, shareholders eligible for being awarded double voting rights are
With respect to ESG integration, adjusting financial model inputs based on an evaluation of a company’s ESG risk factors is an example of a:
When incorporating ESG factors into valuation inputs, which of the following would most likely require the lowest discount rate?
Which of the following has the long-term goal to keep the increase in global average temperature to well below 2°C (3.6°F) above pre-industnal levels?
Which of the following technologies is most likely to be viewed by investors as a strategic solution to the decarbonization of high-temperature processes?
Which of the following scenarios best illustrates the concept of a ‘just’ transition?
The Cadbury Committee was created because of perceived problems in:
Which of the following statements about ESG integration in fixed income is most accurate?
Best-in-class funds most likely:
Which of the following statements regarding ESG considerations and sovereign debt is most accurate?
Considering ESG integration, an advantage relevant to private real estate markets but not equities and fixed income is most likely:
Third-party assessments that highlight events, behaviors, and practices that may lead to reputational and business risks and opportunities are best classified as:
Which of the following best characterizes a climate mitigation strategy rather than a climate adaptation strategy?
Which of the following is part of the ASEAN Taxonomy for an economic activity to be considered environmentally sustainable?
All else equal, a higher discount rate applied to a company’s discounted cash flow (DCF) analysis will lead to:
Philanthropy is most likely associated with:
The European Union (EU) Ecolabel:
For investors in corporate fixed-income securities, engagement is most likely to be effective if conducted:
A challenge to ESG integration at the asset allocation level when using mean-variance optimization is that it:
With regards to the climate, financial materiality:
A difficulty of integrating ESG into sovereign debt analysis is most likely the:
To reflect weak governance of a private equity holding, an analyst's model should most likely include a reduction in the holding's:
According to the Global Sustainable Investment Alliance (GSIA), as of 2020, the largest sustainable investment strategy globally is:
Which of the following best describes a mature ESG regulatory framework? A government putting forward:
The perpetual compound annual rate that a company’s cash flow is assumed to change by after the discrete forecasting period is referred to as the:
Which of the following ESG screening methodologies is most likely to result in a well-diversified portfolio? Screening on:
In Japan, additional statutory auditors are individually appointed by the:
Which of the following parties is most likely to help investors identify the extent and depth to which investment funds integrate ESG?
With reference to data security and customer privacy issues, a technology company in the research and development stage with no commercially marketed products is most likely to have:
Which of the following statements regarding ESG ratings in the credit area is most accurate?
Analyzing a portfolio's social impact exposure is best achieved by first understanding material social topics at:
According to the Stockholm Resilience Centre, how many of the nine planetary boundaries have already been crossed as a result of human activity?
Interest by retail investors in responsible investing has:
Which of the following statements regarding ESG tools is most accurate?
Compared to developed markets, ESG investing in emerging markets is most likely characterized by:
When employing an ESG integration strategy, asset managers are most likely to:
Among ESG data and research providers, traditional providers tend to:
An organization conducts assessments that highlight events, behaviors, and practices that may lead to reputational and business risks and opportunities. This organization is best classified as a provider of:
Which of the following statements is most accurate? Faith-based Islamic investors:
For consistency purposes, the International Sustainability Standards Board (ISSB) requires sustainability disclosures to be:
For which of the following asset classes are investment managers most likely to use voting to exert influence on a company?
Regulations relating to ESG investing generally involve which of the following themes?
The low correlation between the ratings from different ESG rating agencies:
An ESG-contingent asset for a healthcare company may result from:
A situation in which a company making good strides toward more sustainable practices but is unwilling to reveal as much for fear of retribution or misinterpretation is best described as:
According to the Stockholm Resilience Centre, which of the following planetary boundaries has been crossed as a result of human activity?
Which of the following are social megatrends?
ESG portfolio optimization most likely:
A disadvantage of the Global Real Estate Sustainability Benchmark (GRESB) framework is that it:
Which of the following is most likely an example of quantitative ESG analysis? Analyzing:
Passive investors typically start engagement by:
What did Semite, Bhagwat, and Yankee's 2018 study conclude about board diversity and governance?
The carbon offset market:
Which of the following statements regarding the impact of social issues on potential investment opportunities is most accurate?
To address conflicts of interest and maintain the independence of audit firms, EU law requires firms to abide by:
Which of the following statements regarding engagement and stewardship is most accurate?
Which of the following sectors receives the highest investment from the Inflation Reduction Act of 2022 (IRA)?
A company's Scope 2 emissions are:
Which of the following board committees aims to ensure that the board is balanced and effective?
A credit investor uses fundamental credit measures and sector-specific ESG indicators to evaluate a beverage company. Water is a key input for the ingredients used in the company's products. For the investor, the company's efforts to ensure a steady supply of water would most likely be considered:
Green investment is a broad sub-category of:
Regarding ESG engagement, debt and equity investors' interests are most likely aligned when the investee:
ESG performance attribution:
A pension fund concerned about climate change will most likely:
An investment in a fund developing low-cost community housing is best categorized as:
According to the International Corporate Governance Network (ICGN) Model Mandate:
Which of the following countries has a joint audit requirement that all public interest entities must engage at least two independent accounting firms to perform an annual audit?
In Australia, a managing director of a company is the:
When accounting for a critical weakness in a company's environmental management process, an analyst using a discounted cash flow (DCF) valuation model should:
According to the Principles for Responsible Investment, which of the following engagement dynamics creates value?
Working conditions on a tree plantation are most likely an example of a(n):
Regime switching strategic asset allocation models are:
Which of the following is an example of collaborative engagement?
New technologies have enabled workers to:
A company’s emission reduction commitments are best evaluated using:
Information for use in ESG tools can be collected directly via:
Credit-rating agencies are most likely classified as:
Non-recyclable waste is eliminated in the:
Which of the following scenarios best illustrates the concept of a 'just' transition?
Anti-corruption laws are a relevant governance factor for which of the following investments?
Which of the following statements is least accurate? Compared to social and environmental factors, governance has a:
A bond issued to finance construction of a solar farm is an example of a:
What type of provider of ESG-related products and services is CDP (formerly known as Carbon Disclosure Project)?
Which of the following is most likely a secondary source of ESG information?
Which of the following is the main driver of stewardship efforts?
Applying ESG screens to quantitative strategies directs the portfolio on:
The EU Paris-Aligned Benchmarks and EU Climate Transition Benchmarks both:
Scorecards for ESG analysis are most likely:
Which of the following encourages institutional investors to work together on human rights and social issues?
In which of the following circumstances is Free, Prior, and Informed Consent (FPIC) most applicable?
Which of the following is one of the four phases of activities contained by the LEAP assessment framework developed by the Taskforce on Nature-related Financial Disclosures (TNFD)?
Corporate disclosures in line with the recommendations of the Corporate Sustainability Reporting Directive (CSRD) are a regulatory requirement for companies in:
The challenge of ESG integration for an investor is most likely attributable to:
Regrowing previously logged forests is most likely an example of climate:
Avoiding long-term transition risk can most likely be achieved by:
Which of the following is most likely to cast doubt on a director’s independence?
Which of the following social factor scenarios is most likely to affect revenue forecasting?