A bond issued to fund projects that provide a clear benefit to the environment best describes a:
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:
According to the Taskforce on Nature-related Financial Disclosures (TNFD), the four realms of nature include
The UK’s Green Finance Strategy identifies the policy lever of financing green as
The offering of indexes and passive funds with ESG integration by asset managers
With respect to ESG engagement for a company that is a going concern, the interests of equity investors and debt investors are most likely.
For a board to be successful the most important type of diversity needed is:
What is the underlying principle of the corporate governance code in most markets?
The concept of double-agency in society refers to the conflict of interest between
When assessing credit and ESG ratings, which of the following statements is most accurate?
The role of auditors is to assess the financial reports prepared by management and to provide assurance that:
Which of the following is most likely the primary driver of ESG investment for a life insurer?
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:
In contrast to engagement dialogues, monitoring dialogues most likely involve:
The EU Paris-Aligned Benchmarks and EU Climate Transition Benchmarks both:
Institutional investors achieve their stewardship and engagement objectives in practice through which of the following?
According to an OECD Centre for Opportunity and Equality (COPE) 2015 report, the average income of the richest 10% of the population is about:
Which of the following is an advantage of using ESG index-based strategies?
According to the framework of the Task Force on Climate-Related Financial Disclosures (TCFD): the formula for carbon intensity at the portfolio level weighs emissions based upon an issuer's:
A company reduces water usage and increases usage of more expensive resources after regulations become more stringent. This most likely impacts:
Which of the three ESG factors is most often taken into consideration by traditional investment analysts?
Under the disclosure guide for public equities published by the Pension and Lifetime Savings Association (PLSA). fund managers are expected to report on:
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 climate risks are systemic risks to the financial system?
Will including additional ESG constraints in a portfolio optimization model most likely affect tracking error?
Compared to developed markets, ESG investing in emerging markets is most likely characterized by:
The Taskforce on Nature-Related Financial Disclosure (TNFD) defines nature as:
A common characteristic of the EU Paris-Aligned Benchmarks and the EU Climate Transition Benchmarks is that they both:
The social factor most widely incorporated by institutional investors in their analysis is:
Which of the following pension fund actors are most likely exposed to fiduciary legal risks from financial losses caused by climate change?
According to Greenhouse Gas (GHG) Protocol Standards, the emissions associated with suppliers and consumers are classified as:
Which of the following is a for-profit provider offering multiple ESG-related products and services?
Bonds that fund projects that provide access to essential services, infrastructure, and social programs to underserved people and communities are best described as:
A social media company faces criticism from a consumer action group for selling user data to advertising clients. A potential lawsuit will have the greatest direct effect on the company’s:
An analyst reads the following statements about wastewater treatment plants:
Statement I: Wastewater treatment plants are capital intensive.
Statement II: Wastewater treatment plants are difficult to maintain.
Which of the following is correct?
According to the Principles of Responsible Investment (PRI), which of the following is an example of a social issue?
Negative screening of tobacco-related products is best grouped into which of the following basic categories?
Which of the following statements is most accurate? The Kyoto Protocol was created to:
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?
In the investment management industry, triple bottom line accounting theory:
With respect to exclusion policies, which of the following falls outside of the traditional spectrum of responsible investment?
Natural language processing (NLP) is employed as a tool in ESG investing to:
For engagement strategies to deliver meaningful results in a cost-effective and time-effective manner, investors must:
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 organizations is not a provider of both ESG-related and non-ESG-related products and services?
During the decommissioning phase of a company’s mining project, the government tightens regulations on land restoration. Which of the following is most likely impacted?
Working conditions on a tree plantation are most likely an example of a(n):
Corporate engagement and shareholder action is the predominant investment strategy in:
Which of the following is one of the main principles of stewardship codes?
According to the UK Pensions and Lifetime Savings Association Stewardship Checklist, during the RFP process pension fund trustees considering active fixed income managers should:
In which of the following fixed-income asset classes is ESG integration most developed?
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?
When considering material ESG factors in real estate, which of the following is classified as an environmental factor?
Which of the following private equity investors is most susceptible to allegations of greenwashing? An investor that views ESG integration as a way of:
Which of the following is an example of indirectly sourced primary ESG data?
Which of the following statements about the materiality of social factors is most accurate?
In order to safeguard the independence of the external auditor, European Union (EU) regulation:
In comparison to institutional investors, the pace of adoption of ESG by retail investors has been:
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 French company is most likely considered to have weak corporate governance practices if its board:
According to the United Nations Principles for Responsible Investment (PRI), modern fiduciary duty would require investment managers to:
For investments in wastewater treatment plants, a significant obstacle is:
According to market reviews conducted by the Global Sustainable Investment Alliance at the start of 2020, sustainable investing assets in the five major markets stood at approximately:
A mature company has launched a product that reduces customers' electricity usage. This should be incorporated into the company’s discounted cash flow (DCF) analysis by increasing its:
Which of the following is an example of a social factor affecting external stakeholders?
Considering the climate-related impacts on a company's financials and the impacts of a company on the climate best describes:
The rules that can be used to construct ESG exchange-traded funds (ETFs) include:
Which of the following statements about green bonds and sustainability-linked bonds (SLBs) is most accurate?
Which of the following board committees aims to ensure that the board is balanced and effective?
Which of the following is most likely to cast doubt on a director’s independence?
For a board to be successful, the most important type of diversity relates to:
The low correlation between the ratings from different ESG rating agencies:
Which of the following is a minimum requirement for Principles for Responsible Investment (PRI) membership?
An asset owner inquiring within a request for proposal (RFP) if the asset manager has an explicit objective to "generate a positive, measurable ESG outcome alongside a financial return" is most likely aligned with a(n):
Companies may be excluded from the UK Modern Slavery Act on the basis of:
Which of the following statements regarding ESG screening is most accurate?
ESG factors impacting balance sheet strength rather than growth opportunities are most material to:
Which of the following statements about the effects of globalization are most likely correct?
Statement 1: Globalization has led to increased efficiency in markets, resulting in wider availability of products at lower costs.
Statement 2: Globalization has led to increased social well-being due to a reduction in social structural inequality.
In Japan, additional statutory auditors are individually appointed by the:
In ESG integration, which of the following best describes a data-informed analytical opinion designed to support investment decision-making?
According to the Global Sustainable Investment Alliance (GSIA), as of 2020, the largest sustainable investment strategy globally is:
Which of the following scenarios best illustrates the concept of a ‘just’ transition?
For which of the following environmental megatrends are ordinary workers most likely to bear the cost?
Compared to traditional index-based funds, ESG index-based funds typically have:
When determining ESG investment mandates, an asset owner should consider:
Which of the following ESG risks is most likely to impact sovereign debt?
Using the “shades of green" methodology developed by the Center for International Climate Research (CICERO), a project that does not explicitly contribute to the transition to a low carbon and climate resilient future is given the shading of:
Which of the following is one of the six environmental factors in the “Materiality Map" by Sustainability Accounting Standards Board (SASB)?
A discount retailer facing a consumer boycott due to its poor working conditions will most likely face:
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:
In which country is the nominations committee drawn from shareholders rather than being a committee of the board?
Which of the following is part of the ASEAN Taxonomy for an economic activity to be considered environmentally sustainable?
According to the Stockholm Resilience Centre, which of the following planetary boundaries have already been crossed as a result of human activity?
Which of the following ESG investment approaches is most likely applicable when investing in sovereign debt?
To be aligned with the EU Taxonomy for Sustainable Activities, economic activities should make a substantive contribution to:
To address conflicts of interest and maintain the independence of audit firms, EU law requires firms to abide by:
An investment in a fund developing low-cost community housing is best categorized as:
In the transition to a low-carbon economy, a coal-powered utility without a mitigation strategy will most likely pose the highest risk to its:
A fund focused on avoiding the worst ESG performers relative to industry peers is most likely engaged in:
With respect to ESG reporting by investment managers, the 2020 version of the UK Stewardship Code calls for more reporting on the:
Concerns about the capital structure and financial viability of an investee company are most likely reflected in an active investor's voting decisions in relation to:
According to the Principles for Responsible Investment (PRI), which of the following ESG engagement dynamics most likely create value?
Which of the following statements about ESG integration in fixed income is most accurate?
The debate around regulating the social media industry is based on risks associated with:
The Integrated Biodiversity Assessment Tool (IBAT) is best described as an interactive mapping tool allowing decision makers to:
An analyst gathers the following information about three investors' approaches to ESG integration:
The approach of which investor most likely raises the risk of greenwashing?
Technology and finance sectors are most likely to be underweighted when portfolios are screened for:
Which of the following is most likely the easiest to demonstrate in attributing returns to ESG-related actions?
According to the Brunel Asset Management Accord, which of the following is most likely a concern for the asset owner? A fund manager:
Which of the following governance initiatives was focused on increased oversight of banks?
The challenge of ESG integration for an investor is most likely attributable to:
All else equal, a higher discount rate applied to a company’s discounted cash flow (DCF) analysis will lead to:
Integrating the impact of material ESG factors into traditional financial analysis for a company with strong ESG practices most likely.
Compared to an optimal portfolio that does not have any ESG restrictions a portfolio that optimizes for multiple ESG factors will most likely experience
A fund focused on investing in the best ESG performers relative to industry peers across a range of different criteria is most likely engaged in:
Which of the following statements is aligned with the Pensions and Lifetime Savings Association (PLSA) Stewardship checklist?
Statement 1: Investors should seek to ensure that fund managers deliver effective separation of long-term ESG factors from their investment approach.
Statement 2: Investors should work with their advisers to consider the level of resource available for stewardship activities.
Which of the following statements regarding engagement and stewardship is most accurate?
The first step in the effective design of a client ESG investment mandate is to:
Which of the following ESG megatrends relates to issues around human rights, including free speech, and tensions between big social media companies and sovereign nation-states that point in the direction of a possible new ordering of societal power?
To reflect weak governance of a private equity holding, an analyst's model should most likely include a reduction in the holding's:
Which of the following best describes a mature ESG regulatory framework? A government putting forward:
With regards to environmental analysis in fixed income investing, a country-level analysis is relevant to:
Which of the following parties is most likely to help investors identify the extent and depth to which investment funds integrate ESG?
Which of the following statements about ESG integration in credit ratings is most accurate?
When considering strategic asset allocation, would stranded asset risk most likely be a similar concern for fixed income and equity investors?
Which of the following events typically increases the discount rate in an investor's discounted cash flow (DCF) model? The investee company:
The Global Real Estate Sustainability Benchmark (GRESB) full benchmark report provides a GRESB score. The GRESB score includes and weights which of the following considerations?
Management, policy, and disclosure
Overall portfolio key performance indicator (KPI) performance
ESG indices that exclude economically meaningful sectors will most likely:
According to the fundamental conventions of the International Labour Organization (ILO), which of the following should not be supported as a labor right by companies?
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:
According to a study by Berg, Koelbel, and Rigobon, the correlation of ESG ratings is:
According to market reviews conducted by the Global Sustainable Investment Alliance at the start of 2022, the smallest sustainable investment strategy globally (in terms of assets) is:
Regarding ESG engagement, debt and equity investors' interests are most likely aligned when the investee:
Which of the following is most likely a success factor characteristic of the engagement approach? Investors pursuing the engagement should have: