[Sep-2024] ESG-Investing Exam Dumps Pass with Updated 2024 Certificate in ESG Investing [Q166-Q190]

NO.166 The UK’s Green Finance Strategy identifies the policy lever of financing green as

strengthening the role of the UK financial sector in driving green finance

directing private sector financial flows to economic activities that supportan environmentally sustainable and resilient growth.

ensuring that the financial sector systematically considers environmental and climate factors in its lending and investment activities.

NO.167 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.

Statement 1 only

Statement 2 only

Both Statement 1 and Statement 2

NO.168 A hurdle to adopting ESG investing is most likely a:

lack of suitable benchmarks.

focus on short-term performance.

lack of options outside of equities.

NO.169 The signatories of the Kyoto Protocol are committed to:

transition their investment portfolios to net-zero greenhouse gas (GHG) emissions by 2050

limit and reduce their greenhouse gas (GHG) emissions in accordance with agreed individual targets

strengthen the response to the threat of climate change by keeping a global temperature rise well below 2°C (3.6°F) above pre-industrial levels

NO.170 Which of the following initiatives is most closely associated with the increased prevalence of antimicrobial resistance?

The Bangladesh Accord

Access to Medicine Index

Farm Animal Investment Risk and Return

NO.171 When incorporating ESG factors into valuation inputs, which of the following would most likely require the lowest discount rate?

A company with strong ESG practices

A high-growth technology company operating in emerging markets

A company that is judged to have a negative environmental impact

NO.172 The concept of double-agency in society refers to the conflict of interest between

corporate CEOs and shareholders

money managers and asset owners.

corporate CEOs and money managers

NO.173 Which of the following statements about voting is most accurate?

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

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

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

* Importance of Voting in Governance:
* Voting is a critical tool for shareholders to influence corporate governance. It allows them to approve or reject decisions that can impact the company’s long-term viability.
* According to the CFA Institute, effective voting practices are a fundamental aspect of good stewardship, ensuring that companies are managed in the best interests of shareholders and other stakeholders.
* Role of the Audit Committee:
* The audit committee plays a crucial role in overseeing the integrity of financial reporting, compliance with legal and regulatory requirements, and the effectiveness of internal controls.
* The CFA Institute emphasizes that the audit committee’s effectiveness is vital for maintaining investor confidence, particularly in companies with financial viability concerns.
* Investor Attention to Audit Committee Reappointments:
* When there are concerns about a company’s financial health, it is essential for investors to scrutinize the reappointment of audit committee members. These members are responsible for ensuring that financial statements are accurate and that there is adequate oversight of the auditing process.
* Investors should consider voting against the reappointment of audit committee members if they
* believe that these individuals have not adequately fulfilled their responsibilities or if there are significant issues with financial reporting.
* Voting as a Stewardship Tool:
* Voting decisions related to the audit committee can reflect broader concerns about governance practices and financial transparency. By exercising their voting rights, investors can signal their expectations for higher standards and accountability.
* The CFA Institute notes that voting against certain board members or committees can be a powerful way to drive improvements in corporate governance and financial oversight.
References:
* CFA Institute, “Environmental, Social, and Governance Issues in Investing: A Guide for Investment Professionals.”
* MSCI ESG Ratings Methodology, which highlights the importance of voting in addressing governance concerns.

NO.174 The EU Paris-Aligned Benchmarks and EU Climate Transition Benchmarks both:

prohibit investments in fossil fuels

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

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

NO.175 With regard to screening, exclusions that are not supported by global consensus are best described as:

universal exclusions

idiosyncratic exclusions

conduct-related exclusions

NO.176 According to the Brunel Asset Management Accord, which of the following is least likely a cause for concern when evaluating an asset manager against an ESG investment mandate?

Change in investment style

Loss of key personnel in the organization

Short term underperformance compared to benchmark

NO.177 For developed markets, an increase in inequality between the richest and the poorest population of a country most likely results in:

lower social mobility

greater reliance on family structures

higher economic growth in skill-based industries

NO.178 Which of the following would credit rating agencies (CRAs) most likely focus on in order to test how ESG factors affect an issuer’s ability to convert assets into cash?

Capital structure analysis

Interest coverage ratio analysis

Profitability and cash flow analysis

NO.179 With respect to the current state of ESG disclosure globally, issuer reporting frameworks for ESG information are

mandatory

fragmented.

harmonized.

NO.180 According to the UK Investor Forum which of the following is a key success factor for effective engagement?

Transparency on conflicts of interest

Regulatory approval of the collaboration

Clear leadership with appropriate relationships, skills and knowledge

NO.181 Which of the following steps in the ESG rating process is most likely the earliest source of the dispersal of opinions between different ESG rating agencies?

Identification of ESG factors

Determination of weighting and scoring methodologies

Gathering of a set of data points for the identified ESG indicators

NO.182 Which of the following is part of the ASEAN Taxonomy for an economic activity to be considered environmentally sustainable?

Contributing substantially to at least one of the six environmental objectives

Complying with minimum, ASEAN-specified social and governance safeguards

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

NO.183 Which of the following statements regarding ESG screening is most accurate?

There is limited availability of sustainability ratings for collective funds

ESG screening does not consider stewardship and engagement activities

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

NO.184 The Integrated Biodiversity Assessment Tool (IBAT) is best described as an interactive mapping tool allowing decision makers to:

assess companies’ preparedness for biodiversity risk

manage biodiversity and social risk in project finance

identify biodiversity risks and opportunities within a project boundary

NO.185 The challenge of ESG integration for an investor is most likely attributable to:

a lack of third-party ESG data providers.

ESG disclosure mandates by stock exchanges.

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

NO.186 The offering of indexes and passive funds with ESG integration by asset managers

preceded the offering of actively managed ESG funds

occurred at the same time as the offering of actively managed ESG funds.

followed the offering of actively managed ESG funds

NO.187 Which of the following challenges is most likely related to the attribution of returns to ESG factors?

Difficulty to demonstrate the value added by a programme of engagement

Difficulty to assess the performance drag that comes from excluding an industrial sector

Performance attribution to ESG factors is still in its early stages and may well need further assurance and consistency for it to have real power

NO.188 The process of ESG portfolio optimization requires:

targeting sustainability-aligned themes as means to construct a portfolio

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

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

NO.189 As a result of an aging population, which of the following sectors is most likely to experience slower growth?

Healthcare

Consumer goods

Wealth management

NO.190 According to the Brunel Asset Management Accord, which of the following is most likely a concern for the asset owner? A fund manager:

having short-term investment underperformance

taking lower risk compared to the investment mandate

generating returns consistently above the industry average

[Sep-2024] ESG-Investing Exam Dumps Pass with Updated 2024 Certificate in ESG Investing [Q166-Q190]

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