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A prominent institutional investor forms a committee to support global investments to achieve net zero GHG emissions by 2050. To inform this investment strategy, the committee relies on the IEA Net-Zero Scenario.

How should the committee proceed with investments to align with IEA milestones?

A.

Invest in electric vehicles sufficiently to help make electric vehicles 30% of global vehicle sales by 2030.

B.

Divest nuclear energy assets sufficiently to increase solar and wind energy shares of global energy production to 50% by 2050.

C.

Invest in energy infrastructure sufficiently to ensure all new buildings are “zero-carbon-ready” by 2050.

D.

Divest coal assets sufficiently to support a phase-out of all coal plants in advanced economies by 2030.

To comply with publicly stated climate goals, a country dependent on fossil fuel production begins phasing out oil production facilities. Climate activists largely celebrate this commitment, while expressing concern for a just transition. Which of the following just transition programs will the activists most likely support?

A.

Increased funding for researchers examining alternatives to carbon-intensive fuel sources

B.

Subsidies provided to low-income residents who use carbon-intensive fuels

C.

A national scholarship program to retrain displaced workers from carbon-intensive industries

D.

An annual tax rebate for workers transitioning to jobs outside of carbon-intensive industries

A large country joins the Paris Agreement and directs the national environmental department to disseminate new policies and goals to relevant federal agencies. Most agencies are familiar with past climate agreement principles and protocols but not those of the Paris Agreement.

The environmental department should educate federal agencies on what feature of the Paris Agreement?

A.

Differentiated mitigation responsibilities according to national capabilities

B.

Voluntary national climate targets updated on a regular basis

C.

Investment in clean energy projects in exchange for emissions credits

D.

Strategies for developing countries to advance mitigation plans

A large real estate investment firm increases resources to understand transition and physical risks as it expands into markets with climate regulations and increasing flooding events. Senior leadership requires the risk team train all business units in understanding how both climate risks can impact operations.

During this process, how should the risk team define commonalities between both risks?

A.

Each risk type can lead to stranded assets of investee companies.

B.

Renewable energy investment returns will likely increase as each risk type grows.

C.

The timing of impacts from each risk type will follow similar trajectories.

D.

The majority of impacts from each risk type will manifest after 2050.

A financial services firm in South America evaluates climate-related financial risks and opportunities to align with ISSB reporting standards. The firm initiates a scenario analysis to determine potential impacts on its investment portfolio. To enable a thorough assessment, which climate scenario input parameter should the firm prioritize in the analysis?

A.

Asset allocation

B.

Net earnings

C.

Carbon price

D.

Employee productivity

A scientist at a large agricultural company develops an internal presentation that explains weather variation and long-term climate change. The scientist presents global annual temperature anomalies (relative to a 1951-1980 average) throughout the last 20 years:

What natural forcing contributed to the temperature trend from 2014 to 2016?

A.

El Niño

B.

La Niña

C.

Orbital fluctuations

D.

Volcanic eruptions

In response to a survey showing consumers consider sustainability a key factor in purchasing decisions, a group of cosmetics companies announce a collaboration to develop an environmental impact assessment and sustainability framework for cosmetics products. The framework enables customers to evaluate the environmental impact of products they purchase. The framework draft includes definitions of climate, green, and sustainable finance.

Which of the following definitions is appropriate for the proposed framework?

A.

Green finance refers exclusively to financial flows relating to climate change such as mitigation or adaptation.

B.

Green finance refers to sustainable finance focused on environmental risks and opportunities.

C.

Sustainable finance refers to public sector funding of projects relating to ESG and sustainable development.

D.

Climate finance is a subset of green finance and broadly refers to any financial transaction that considers climate issues.

A Southeast Asian national military plans infrastructure investments that incorporate climate risk considerations. Part of the planning process includes climate scenario analysis. After considering several scenarios, the military assumes a future with increasing regional rivalry and conflict among nations.

The military will rely on which global reference scenario to inform its scenario analysis?

A.

RCP 2.6

B.

SSP1

C.

SSP3

D.

RCP 1.9

A company reduces water usage and increases usage of more expensive resources after regulations become more stringent. This most likely impacts:

A.

revenues

B.

provisions

C.

operating expenditure

The Commissioners of Insurance for a state in the western United States recommends all insurers now report annually on climate change, using TCFD guidance.

Which of the following sectors do the commissioners correctly identify as encompassing the full scope of the TCFD recommendations?

A.

Asset managers and owners, endowments, foundations, and additional financial and non-financial organizations

B.

Asset managers and owners, endowments, foundations, and additional financial sector representatives

C.

Institutional Investors Group-based benchmarking and GRI-derived data on climate change

D.

Energy, transportation, materials and buildings, agriculture, land and forestry companies