Halloween Special Sale Limited Time 70% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: scxmas70

ESG-Investing Exam Dumps - Certificate in ESG Investing

Question # 4

The EU Paris-Aligned Benchmarks and EU Climate Transition Benchmarks both:

A.

prohibit investments in fossil fuels

B.

impose green-to-brown ratios to restrict “brown" investments

C.

use a relative approach by comparing a company's performance to its sector average

Full Access
Question # 5

Asset owners can reflect ESG considerations through corporate engagement by:

A.

discussing ESG issues with an investee company’s board.

B.

working with regulators to design a more stable financial system.

C.

using ESG criteria to identify investment opportunities through a thematic approach.

Full Access
Question # 6

To produce a rating, an ESG rating provider will most likely apply a weighting system to

A.

qualitative data only

B.

quantitative data only

C.

both qualitative data and quantitative data

Full Access
Question # 7

Regrowing previously logged forests is most likely an example of climate:

A.

resilience

B.

change mitigation

C.

change adaptation

Full Access
Question # 8

Negative screening for ESG factors in portfolios:

A.

results in static exclusions.

B.

can exclude an entire country.

C.

is commonly applied to all asset classes.

Full Access
Question # 9

Avoiding long-term transition risk can most likely be achieved by:

A.

investing in companies with stranded assets.

B.

divesting highly carbon-intensive investments in the energy sector.

C.

reducing exposure to companies exposed to extreme weather events.

Full Access
Question # 10

The European Union (EU) Ecolabel:

A.

is the official EU voluntary label for environmental excellence

B.

targets explicit claims made on a voluntary basis by businesses towards consumers

C.

flags products that have a guaranteed, independently verified, high environmental impact

Full Access
Question # 11

Which of the following actions is best categorized as an escalation of engagement?

A.

Arranging a meeting with the investor relations team

B.

Engaging management through an operational site visit

C.

Submitting resolutions and speaking at general meetings

Full Access
Question # 12

According to the Sustainability Accounting Standards Board (SASB), GHG emission is material for more than 50% of the industries in which sector?

A.

Health care

B.

Technology and communications

C.

Extractives and minerals processing

Full Access
Question # 13

In which country is the proposal of shareholder resolutions most common?

A.

UK

B.

US

C.

Australia

Full Access
Question # 14

In contrast to active investors, passive investors are most likely to:

A.

seek a direct discussion with senior management and then the board

B.

start their engagement process by writing a letter to all the companies impacted by a certain ESG issue

C.

focus their engagement on companies identified as underperformers or ones that trigger other financial or ESG metrics

Full Access
Question # 15

Which of the following scenarios best illustrates the concept of a 'just' transition?

A.

A region transitioning to solar power subsidizes businesses to install solar arrays

B.

A region transitioning to a smaller public sector workforce funds outplacement programs for displaced office workers

C.

A region transitioning away from iron ore mining helps displaced miners to work in the safe decommission of abandoned mines

Full Access
Question # 16

Which of the following statements regarding ESG screening is most accurate?

A.

There is limited availability of sustainability ratings for collective funds

B.

ESG screening does not consider stewardship and engagement activities

C.

Only collective funds with a high level of ESG integration have a high sustainability rating

Full Access
Question # 17

Avoiding long term transition risk can most likely be achieved by:

A.

investing in companies with stranded assets.

B.

divesting highly carbon-intensive investments in the energy sector.

C.

reducing exposure to companies exposed to extreme weather events

Full Access
Question # 18

Which of the following is one of the five main drivers of nature change described by the Taskforce on Nature-related Financial Disclosures (TNFD)?

A.

Ecosystem services

B.

Invasive alien species

C.

Transmission channels

Full Access
Question # 19

Assessing the alignment of local labor laws with International Labour Organization (ILO) principles is an example of social analysis at the:

A.

sector level

B.

country level.

C.

company level

Full Access
Question # 20

As policies on ESG issues and financial regulation across countries reach maturity, which of the following is least likely to occur?

A.

Changing from voluntary to mandatory disclosures

B.

Moving from policy to implementation and reporting

C.

Moving away from “comply and explain” regulation to “comply or explain” regulation

Full Access
Question # 21

low risk exposure to this factor in the short run

A.

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:

B.

medium risk exposure to this factor in the short run.

C.

high risk exposure to this factor in the short run.

Full Access
Question # 22

Scorecards for ESG analysis are most likely:

A.

applicable to public companies but not private companies.

B.

used when third-party research or scores are not available.

C.

inappropriate for country-level assessments of sovereign bonds.

Full Access
Question # 23

An unfavorable corporate governance assessment would most likely be incorporated in valuation through reduced:

A.

discount rates.

B.

risk premia in the cost of capital.

C.

levels of confidence in the valuation range.

Full Access
Question # 24

Which of the following technologies is most likely to be viewed by investors as a strategic solution to the decarbonization of high-temperature processes?

A.

Nuclear fusion

B.

Next-generation battery storage

C.

The use of renewable energy to produce hydrogen

Full Access
Question # 25

Which of the following is one of the four realms of nature described by the Taskforce on Nature-related Financial Disclosures (TNFD)?

A.

People

B.

Oceans

C.

Biodiversity

Full Access
Question # 26

The Kyoto Protocol established emissions targets that are:

A.

binding on all countries.

B.

voluntary for all countries.

C.

binding only on developed countries.

Full Access
Question # 27

For developed markets, an increase in inequality between the richest and the poorest population of a country most likely results in:

A.

lower social mobility

B.

greater reliance on family structures

C.

higher economic growth in skill-based industries

Full Access
Question # 28

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

Full Access
Question # 29

In ESG integration, model adjustments are typically performed at the:

A.

research stage

B.

valuation stage.

C.

portfolio construction stage

Full Access
Question # 30

Which of the following is most likely a reason for concern regarding the quality of a company's ESG disclosures?

A.

The inclusion of audited ESG data

B.

Competitors have stronger disclosure standards

C.

There is written commitment to improve future ESG disclosure

Full Access
Question # 31

As a percentage of the overall materiality threshold reported in enhanced audit reports, performance materiality is typically:

A.

50%

B.

60%

C.

75%

Full Access
Question # 32

Norms-based screening is the largest investment strategy in

A.

japan

B.

europe

C.

the united states

Full Access
Question # 33

New technologies have enabled workers to:

A.

improve their work-life balance only.

B.

adopt more flexible working patterns only.

C.

both improve their work-life balance and adopt more flexible working patterns.

Full Access
Question # 34

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?

A.

taxes

B.

revenue

C.

provision

Full Access
Question # 35

A hurdle to adopting ESG investing is most likely a:

A.

lack of suitable benchmarks.

B.

focus on short-term performance.

C.

lack of options outside of equities.

Full Access
Question # 36

Natural language processing (NLP) is employed as a tool in ESG investing to:

A.

backtest short time series of ESG data.

B.

quantify online text relating to ESG risk areas.

C.

interpret satellite imagery to assess deforestation.

Full Access
Question # 37

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:

A.

low active share and low tracking error

B.

low active share and high tracking error.

C.

high active share and high tracking error.

Full Access
Question # 38

Which of the following is an example of secondary data?

A.

A news article

B.

A letter to shareholders

C.

A Bloomberg Disclosure score

Full Access
Question # 39

Interest by retail investors in responsible investing has:

A.

been declining over time

B.

remained stable over time

C.

been growing over time

Full Access
Question # 40

Integrating the impact of material ESG factors into traditional financial analysis for a company with strong ESG practices most likely.

A.

leads to a lower estimate of intrinsic value

B.

has no impact on intrinsic value

C.

leads to a higher estimate of intrinsic value

Full Access
Question # 41

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.

lower active risk

B.

higher active risk.

C.

lower tracking error

Full Access
Question # 42

Which of the following statements about the decoupling of economic activities from resource usage is most accurate?

A.

Moving to a circular economy boosts decoupling

B.

The Jevons paradox explains why decoupling happens

C.

Absolute long-term decoupling is more common than relative decoupling

Full Access
Question # 43

Credit-rating agencies are most likely classified as:

A.

algorithm-driven ESG research providers.

B.

traditional ESG data and research providers.

C.

“nontraditional" ESG data and research providers.

Full Access
Question # 44

Exclusionary screening:

A.

reduces portfolio tracking error and active share.

B.

is the oldest and simplest approach within responsible investment.

C.

employs a given ESG rating methodology to identify companies with better ESG performance relative to its industry peers.

Full Access
Question # 45

Which of the following factors is most relevant to the performance outlook of a military equipment manufacturer?

A.

Offshoring

B.

Gender equality

C.

Artificial intelligence

Full Access
Question # 46

ESG engagement is a two-way dialogue to share perspectives between:

A.

investors and investees

B.

asset owners and fund managers

C.

senior executives and board of directors

Full Access
Question # 47

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:

A.

return on equity ratio.

B.

creditors turnover ratio.

C.

liabilities-to-assets ratio.

Full Access
Question # 48

In which country is the nominations committee drawn from shareholders rather than being a committee of the board?

A.

Italy

B.

Sweden

C.

The Netherlands

Full Access
Question # 49

A difficulty of integrating ESG into sovereign debt analysis is most likely the:

A.

shrinking pool of sovereign investment research available

B.

low correlation among credit ratings compared to ESG ratings

C.

smaller number of issuers compared to corporate debt or equities

Full Access
Question # 50

Which of the following statements about quantitative ESG analysis is most accurate?

A.

Quantitative ESG analysis is only based on third-party data

B.

The length of the timeseries for ESG data is shorter than for financial data

C.

Application programming interfaces (APIs) are used to bring structure to the ESG dataset

Full Access
Question # 51

According to Mercer Consulting, which of the following asset classes has the highest availability of sustainability-themed strategies compared to its asset-class universe?

A.

Real estate

B.

Private debt

C.

Infrastructure

Full Access
Question # 52

Working conditions on a tree plantation are most likely an example of a(n):

A.

social issue

B.

governance issue

C.

environmental issue

Full Access
Question # 53

ESG screens embedded within portfolio guidelines can be used as:

A.

a risk management tool only.

B.

a source of investment advantage only.

C.

both a risk management tool and a source of investment advantage.

Full Access
Question # 54

The European Union (EU) Ecolabel:

A.

is the official EU voluntary label for environmental excellence.

B.

targets explicit claims made on a voluntary basis by businesses towards consumers.

C.

flags products that have a guaranteed, independently verified, high environmental impact.

Full Access
Question # 55

Over the past several years, the proportion of sustainable investing relative to total managed assets has fallen in:

A.

Europe

B.

Canada

C.

the United States

Full Access
Question # 56

Regarding ESG issues, which of the following sets the tone for the investment value chain?

A.

Asset owners

B.

Asset managers

C.

Investment consultants

Full Access
Question # 57

Which of the following increases pressure on natural resources?

A.

Population growth

B.

Economic recession

C.

Declining life expectancy

Full Access
Question # 58

Credit-rating agencies are most likely classified as:

A.

algorithm-driven ESG research providers

B.

“traditional” ESG data and research providers

C.

“nontraditional” ESG data and research providers

Full Access
Question # 59

Companies may be excluded from the UK Modern Slavery Act on the basis of:

A.

size only

B.

sector only.

C.

both size and sector

Full Access
Question # 60

Regime switching strategic asset allocation models are:

A.

typically based on historical data

B.

widely utilized by investment practitioners

C.

used to model abrupt changes in financial variables due to shifts in regulations and policies

Full Access
Question # 61

Which of the following statements about voting is most accurate?

A.

Voting is a necessary but not a sufficient element of good stewardship

B.

Concerns about the diversity of a company's board cannot be reflected in voting decisions

C.

If there are concerns about the financial viability of a business, investors need to pay close attention to voting decisions on the reappointment of members of the audit committee

Full Access
Question # 62

A challenge to ESG integration at the asset allocation level when using mean-variance optimization is that it:

A.

is highly sensitive to baseline assumptions

B.

requires specialist knowledge to make informed judgments about future risk

C.

could introduce an additional source of estimation errors due to the need for dynamic rebalancing

Full Access
Question # 63

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?

A.

The Kyoto Protocol

B.

The Paris Agreement

C.

The UN Framework Convention on Climate Change

Full Access
Question # 64

When assessing the investment risk of a coal mining company, the concept of double materiality refers to the company reporting on matters of:

A.

current and future materiality

B.

people and planet materiality

C.

financial and impact materiality

Full Access
Question # 65

What type of provider of ESG-related products and services is CDP (formerly known as Carbon Disclosure Project)?

A.

Nonprofit

B.

Large for-profit

C.

Boutique for-profit

Full Access
Question # 66

Which of the following ESG investment approaches would most appropriately be used to construct a balanced and diversified portfolio?

A.

Thematic investing

B.

Screening on a relative basis

C.

Screening on an absolute basis

Full Access
Question # 67

Which of the following is an example of a bottom-up ESG engagement approach? An asset manager:

A.

joining the PRI Collaboration Platform

B.

sending out a letter to the CFOs of all investee companies

C.

initiating dialogue with an investee company's investor relations team

Full Access
Question # 68

When optimizing a portfolio for ESG factors, as constraint parameters are tightened, the deviation from an optimal portfolio most likely:

A.

decreases.

B.

is not affected.

C.

increases.

Full Access
Question # 69

Which of the following is most likely to cast doubt on a director’s independence?

A.

Holding cross-directorships

B.

Receipt of director's fees from the company

C.

Serving as a director for a relatively short period of time

Full Access
Question # 70

In contrast to engagement dialogues, monitoring dialogues most likely involve:

A.

a two-way sharing of perspectives.

B.

discussions intended to understand the company, its stakeholders and performance.

C.

conversations between investors and any level of the investee entity including non-executive directors.

Full Access
Question # 71

In the European Union, publicly listed firms are obliged to change auditors at least every:

A.

5 years

B.

10 years

C.

20 years

Full Access
Question # 72

Increased investment crowding into more ESG-friendly sectors is most likely to increase

A.

valuations

B.

expected returns.

C.

materiality thresholds

Full Access
Question # 73

Which of the following encourages institutional investors to work together on human rights and social issues?

A.

Human Rights 100+

B.

OECD Guidelines for Multinational Enterprises

C.

United Nations Guiding Principles on Business and Human Rights

Full Access
Question # 74

Non-recyclable waste is eliminated in the:

A.

reuse economy

B.

linear economy

C.

circular economy

Full Access
Question # 75

Organizing companies according to their sustainability attributes, such as resource intensity, sustainability risks, and innovation opportunities, best describes the:

A.

Morningstar sustainability rating.

B.

Sustainable Industry Classification System (SICS).

C.

Task Force on Climate-related Financial Disclosures (TCFD).

Full Access
Question # 76

With respect to exclusion policies, which of the following falls outside of the traditional spectrum of responsible investment?

A.

Indices

B.

Listed equities

C.

Corporate debt

Full Access
Question # 77

Under the disclosure guide for public equities published by the Pension and Lifetime Savings Association (PLSA). fund managers are expected to report on:

A.

ESG integration only.

B.

stewardship activities only.

C.

both ESG integration and stewardship activities

Full Access
Question # 78

Commodity price volatility resulting in profits vulnerability for companies is most likely an example of financial risk transmission by:

A.

micro-channel

B.

macro-channel

C.

company actions

Full Access
Question # 79

Which of the following best summarizes the studies on carbon risk?

A.

Companies with lower levels of CO2 emissions are associated with higher returns

B.

Companies with higher levels of CO2 emissions are associated with higher returns

C.

There is no conclusive evidence on the link between a company's level of CO2 emissions and returns

Full Access
Question # 80

In Australia, a managing director of a company is the:

A.

executive chair.

B.

only executive director.

C.

former CEO of the company.

Full Access
Question # 81

The challenge of ESG integration for an investor is most likely attributable to:

A.

a lack of third-party ESG data providers.

B.

ESG disclosure mandates by stock exchanges.

C.

the vast range of possible ESG data and the conflicting demands among investors and other stakeholders.

Full Access
Question # 82

Which of the following social factor scenarios is most likely to affect revenue forecasting?

A.

Consumer boycotts related to controversial sourcing

B.

Fines related to occupational health and safety failures

C.

High employee turnover related to poor human capital management

Full Access
Question # 83

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

Full Access
Question # 84

Which of the following is part of the ASEAN Taxonomy for an economic activity to be considered environmentally sustainable?

A.

Contributing substantially to at least one of the six environmental objectives

B.

Complying with minimum, ASEAN-specified social and governance safeguards

C.

A principles-based Foundation Framework, which is applicable to all ASEAN member states

Full Access
Question # 85

When integrating ESG analysis into the investment process, deriving correlations on how ESG factors might impact financial performance over time is an example of a:

A.

passive approach

B.

thematic approach

C.

systematic approach

Full Access
Question # 86

A materiality assessment to identify ESG issues impacting a company's financial performance is most likely measured in terms of:

A.

likelihood only.

B.

magnitude of impact only.

C.

both likelihood and magnitude of impact.

Full Access
Question # 87

The process of ESG portfolio optimization requires:

A.

targeting sustainability-aligned themes as means to construct a portfolio

B.

applying a fixed decision on specific securities based on the ESG variable chosen

C.

defining an upper and lower bound for a given ESG variable and applying it on an absolute or benchmark relative basis

Full Access
Question # 88

With respect to the current state of ESG disclosure globally, issuer reporting frameworks for ESG information are

A.

mandatory

B.

fragmented.

C.

harmonized.

Full Access
Question # 89

Is the following statement accurate? "Engagement is meant to preserve and enhance long-term value on behalf of the asset owner by focusing on factors such as capital structure and lobbying."

A.

Yes

B.

No, because engagement does not focus on lobbying

C.

No, because engagement does not focus on capital structure

Full Access