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Under which perspective did the Freshfields Report argue that integrating ESG considerations was necessary in all jurisdictions?

A.

Economic

B.

Fiduciary duty

C.

Impact and ethics

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:

A.

A credit strength only.

B.

An ESG strength only.

C.

Both a credit strength and an ESG strength.

Which of the following ESG risks is most likely to impact sovereign debt?

A.

Cybersecurity risks

B.

Political stability and governance risks

C.

Executive compensation structures

Which of the following best describes a challenge of ESG integration into investment processes?

A.

Cultural challenges and biases within investment management firms

B.

Overly detailed company-level ESG reporting that overwhelms investors

C.

Standardized disclosures in audited financial statements that hinder differentiated analysis

A company's reporting and transparency are initially led by its:

A.

Board

B.

Audit committee

C.

Management team

The European Union (EU) Ecolabel:

A.

Is a mandatory label for companies that apply sustainability labels on their products

B.

Certifies products that have a guaranteed, independently verified, low environmental impact

C.

Contains a list of six key principles designed to prevent businesses from making misleading environmental claims

Which of the following is most likely designed to promote consideration of environmental and social risks in investing?

A.

The EU Taxonomy Regulation

B.

The EU Shareholder Rights Directive

C.

The EU Sustainable Finance Disclosure Regulation

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:

A.

Advisory services

B.

Integrated research

C.

ESG news and alerts

Firms using an engagement style focusing first on individual companies, starting with the chair, and working through the board and down to management most likely have a(n):

A.

Social heritage

B.

Governance heritage

C.

Environmental heritage

Which of the following is most likely an effect of an aging population?

A.

Reduced healthcare expenditures

B.

Increased business risk for the consumer goods sector

C.

Increased ratio between the active and inactive part of the workforce

Which of the following ESG approaches is an investor in sovereign debt most likely to apply?

A.

Active engagement

B.

Exclusionary screening

C.

Stewardship interaction

Which of the following is an example of competence greenwashing?

A.

A company's board overstating their ESG expertise

B.

A company that is unwilling to reveal its strides toward more sustainable practices for fear of misinterpretation

C.

A company providing an incomplete picture of its environmental impact by overemphasizing carbon emissions while ignoring other factors such as toxicity

Morningstar's offering of ESG products and services is an example of a:

A.

Nonprofit ESG provider

B.

Large, for-profit ESG provider

C.

Boutique, for-profit ESG provider

Which of the following statements about externalities is most accurate?

A.

Externalities are reflected in the prices of commercial goods and services

B.

Private costs are higher than societal costs when externalities are negative

C.

Measures to internalize externalities can be taken by corporates or governments

For which of the following environmental megatrends are ordinary workers most likely to bear the cost?

A.

Pollution

B.

Water scarcity

C.

Climate change transition