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Under the International Corporate Governance Network's (ICGN) Global Governance Principles, a board chair's independence is most likely to be questioned if the person:

A.

is a representative of the state.

B.

has a mandate for a short tenure.

C.

is a former non-executive employee of the company.

ESG integration should be considered as part of:

A.

systematic strategies only.

B.

discretionary strategies only.

C.

both systematic strategies and discretionary strategies.

A company's external auditor formally reports to the:

A.

audit committee.

B.

chair of the board of directors.

C.

shareholders at the annual general meeting.

The rules that can be used to construct ESG exchange-traded funds (ETFs) include:

A.

Thematic investing, only

B.

Tilting weightings based on ESG scores, only

C.

Both thematic investing and tilting weightings based on ESG scores

Excluding tobacco from the investment universe is an example of which of the following ESG screening approaches?

A.

Universal exclusion

B.

Idiosyncratic exclusion

C.

Conduct-related exclusion

Compared to developed markets, ESG investing in emerging markets is most likely characterized by:

A.

less data and greater variability between countries and companies.

B.

easier portability of approaches and principles methods from developed markets.

C.

fewer opportunities for investors to engage with companies and improve ESG performance.

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?

A.

Concert party

B.

Soliciting support

C.

Collaborative campaigns

Considering the climate-related impacts on a company's financials and the impacts of a company on the climate best describes:

A.

double materiality.

B.

financial materiality.

C.

dynamic materiality.

A small company based in Sweden operates in an industry that has good sustainability ratings. The company has a low ESG rating that an analyst believes to be biased. The bias would most likely result from the company's:

A.

industry.

B.

company size.

C.

geographical base of operations.

Which of the following would most likely be the initial step when drafting a client’s investment mandate?

A.

Clarifying the client's ESG investment beliefs

B.

Defining how ESG performance will be measured

C.

Reflecting the client's investment beliefs operationally in the fund manager’s investment approach

According to Greenhouse Gas (GHG) Protocol Standards, the emissions associated with suppliers and consumers are classified as:

A.

Scope 1 emissions

B.

Scope 2 emissions

C.

Scope 3 emissions

A portfolio manager of an ESG fund attempting to outperform the general market is most likely to:

A.

ignore non-financial risks.

B.

apply a lower discount rate to companies that poorly manage social factors.

C.

invest in companies that identify social trends early on and adapt their strategy.

An analyst would most likely increase a company’s discount rate if the company:

A.

Has strong ESG practices

B.

Faces significant environmental litigation

C.

Is well-positioned to benefit from ESG opportunities

A French company is most likely considered to have weak corporate governance practices if its board:

A.

has 40% female representation.

B.

is chaired by the company's CEO.

C.

has only three committees: nominations, audit, and risk.

Creating long-term stakeholder value by implementing a strategy that focuses on the ethical, social, environmental, cultural and economic dimensions of doing business is best described as:

A.

corporate sustainability.

B.

triple bottom line accounting.

C.

corporate social responsibility.