CFA ESG Exam Chapter 1

From CFA textbook

Which of the following investment approaches is most likely to be at risk of short-termism

Conventional investing

Which of the following types of responsible investment is focused on the bottom of the pyramid (BOP)?

microfinance bonds

According to stockholm resilience centre, the two core boundaires of the nine planetary boundaries are

biosphere integrity and climate change

ESG integration can have a material financial impact on a company leading to:

reduced risk of fines

Which of the following statements regarding externalities is most accurate?

externalities occur due to environmental or social factors

In addition to the payment of dues and reporting annually on their responsible investing investment practices, which of the following is a minimum requirement for signatories of PRI?

have senior-level commitment for responsible investment implementation

Which of the following orgs developed the model mandate initiative?

ICGN

Which of the following statements is most accurate? the majority of studies suggest that:

ESG performance and corporate financial performance are positively correlated

greenwashing most likely refers to:

companies making misleading claims about their environmental practices

the standard for the UN global compact is overseen by the:

GRI

which of the following requires investors to act with a more long-term focus?

SRD

Which of the following types of responsible investing is not related to portfolio construction?

Shareholder engagement

Which of the following responsible investment approaches most likleu incorporates positive screening?

best-in-class investment

Double materiality is best described as:

an extension of financial materiality that considers the impacts of a company on the climate or any other ESG factor

universal owners are best described as

large institutional investors that have diversified holdings

which of the following statements about the internalization of externalities is most accurate

internalization refers to all measures to ensure externalities are reflected in the prices of commercial goods and services

the SRD is a regulatory initiative to

counter short-termism

the freshfields report was seminal in understanding that:

ESG issues are relevant for financial valuation and fiduciary duty

the proportion of fortune global 500 companies headquarted in emerging markets is expected to:

increase

which of the following statements about population is most accurate

chinas labor force has already peaked

investors demonstrate short termism by

trading based on short-term price movements rather than long-term value

which of the following is not an example of a social factor?

biodiversity

ESG considerations are difficult to value precisely and difficult to time because ESG data:

are not always available

Institutional investors generate sustainable returns from their investments by:

integrating ESG factors into their portfolio construction decisions

What are the four broad groupings of issues covered by the UN Global Compact?

human rights, labor, environment, anti-corruption

which of the following is not one of the three Ps in triple bottom line

Priniciples

best-in-class investments

improves selecting only the companies that overcome a defined ranking hurdle

which of the following sectors is least likely to be excluded by faith and ethical investments

tech

the efficiency of shareholder engagement depends on

whether divestment is known to be a possible sanction

in which ways can ESG matters reduce risk and enhance return

increased adaptability to sustainability megatrends

which of the following situations best illustrates the term negative externality

a products price not reflecting the true costs of that product for society as a whole

which of the following megatrends is most closely related to oxfams report that the richest 1% in the world have more than double the wealth of 6.9 billion people

demographic changes and inequality

insitutuional investors are most likely to engage with policy makers on ESG issues because

considering ESG related matters can contribute to the proper functioning of financial markets