CFA ESG Exam Questions And Answers
Active Ownership - Answer-actively exercising shareholder rights
/.Active Risk - Answer-risk in competing against benchmark index
/.Activism - Answer-Buying into a company with intention of catalyzing change
/.AGM - Answer-Annual General Meeting
/.EGM - Answer-Extraordinary General Meeting
/.Alpha Generation - Answer-Risk adjusted contribution of value the portfolio manager
contributes
/.Animal Welfare - Answer-How animals cope with living conditions
/.Automation - Answer-Technology by which a process is performed with minimum
human assistance
/.Bayesian Inference - Answer-Statistical method used to treat the probability of an
outcome of a given hypothesis as more information comes available
/.Best-in-class Investment - Answer-Selecting only the companies that overcome a
defined ranking hurdle
/.Carbon Dioxide - Answer-Colorless, odorless non-poisonous gas resulting from fossil
fuel combustion. Normally part of ambient air.
/.Carbon Footprint - Answer-Annual amount of GHG emissions that resukt from
activities of an entity. Measured in mass.
/.Carbon Market - Answer-Market created from trading of carbon emissions allowances
in an effort to reduce overall emissions
/.Carbon Sequestration - Answer-Long-term storage of carbon in natural and artificial
reservoirs (Carbon Sinks)
/.Carbon Tax - Answer-Directly sets price on carbon by defining a tax rate on GHG
emissions
/.Carbon Disclosure Project - Answer-a non-governmental organization that supports
disclosure and management of environmental impact
, /.Climate Change - Answer-A change of climate, directly or indirectly attributed to
human activity
/.Climate Change Mitigation - Answer-Human intervention that involves reducing the
sources of GHG emissions OR enhancing the "sink" that stores these gases (forests,
oceans, soil)
/.Climate Disclosure Standards Board - Answer-Business and environmental NGOs with
mission to create conditions for material climate change and natural capital information
to be integrated into reporting
/.Circular Economy - Answer-Economic model of reusing and recycling in a closed loop
that aims to retain the highest utility and value of materials
/.Collective Engagement - Answer-Form of engagement carried out alongside other
investors
/.Commingled Funds - Answer-Pooled investment vehicles with assets of several
different investor accounts and structured to reduce costs or pool together smaller
investors to reach asset size requirements
/.Conference of Parties - Answer-Supreme decision making body of the UN Framework
Convention on Climate Change
/.Consumer Protection - Answer-Laws and other forms of government regulation
designed to protect the rights of consumers
/.Controversial Sourcing - Answer-Ethically debatable cost-driven practices of
companies in their value chain
/.Controversy Case - Answer-Instance or ongoing situation in which company
operations are perceived to have a negative environmental, social, or governance
impact
/.Corporate Reporting Dialogue - Answer-Objective is to drive better alignment of
sustainability reporting frameworks, and promote further integration of non-financial and
financial information
/.Digital Disruption - Answer-Change that occurs when new digital tech and business
models affect the value proposition of existing goods and services
/.Discounted Cash Flow - Answer-View the intrinsic value of a security as the present
value of its expected future cash flows
Active Ownership - Answer-actively exercising shareholder rights
/.Active Risk - Answer-risk in competing against benchmark index
/.Activism - Answer-Buying into a company with intention of catalyzing change
/.AGM - Answer-Annual General Meeting
/.EGM - Answer-Extraordinary General Meeting
/.Alpha Generation - Answer-Risk adjusted contribution of value the portfolio manager
contributes
/.Animal Welfare - Answer-How animals cope with living conditions
/.Automation - Answer-Technology by which a process is performed with minimum
human assistance
/.Bayesian Inference - Answer-Statistical method used to treat the probability of an
outcome of a given hypothesis as more information comes available
/.Best-in-class Investment - Answer-Selecting only the companies that overcome a
defined ranking hurdle
/.Carbon Dioxide - Answer-Colorless, odorless non-poisonous gas resulting from fossil
fuel combustion. Normally part of ambient air.
/.Carbon Footprint - Answer-Annual amount of GHG emissions that resukt from
activities of an entity. Measured in mass.
/.Carbon Market - Answer-Market created from trading of carbon emissions allowances
in an effort to reduce overall emissions
/.Carbon Sequestration - Answer-Long-term storage of carbon in natural and artificial
reservoirs (Carbon Sinks)
/.Carbon Tax - Answer-Directly sets price on carbon by defining a tax rate on GHG
emissions
/.Carbon Disclosure Project - Answer-a non-governmental organization that supports
disclosure and management of environmental impact
, /.Climate Change - Answer-A change of climate, directly or indirectly attributed to
human activity
/.Climate Change Mitigation - Answer-Human intervention that involves reducing the
sources of GHG emissions OR enhancing the "sink" that stores these gases (forests,
oceans, soil)
/.Climate Disclosure Standards Board - Answer-Business and environmental NGOs with
mission to create conditions for material climate change and natural capital information
to be integrated into reporting
/.Circular Economy - Answer-Economic model of reusing and recycling in a closed loop
that aims to retain the highest utility and value of materials
/.Collective Engagement - Answer-Form of engagement carried out alongside other
investors
/.Commingled Funds - Answer-Pooled investment vehicles with assets of several
different investor accounts and structured to reduce costs or pool together smaller
investors to reach asset size requirements
/.Conference of Parties - Answer-Supreme decision making body of the UN Framework
Convention on Climate Change
/.Consumer Protection - Answer-Laws and other forms of government regulation
designed to protect the rights of consumers
/.Controversial Sourcing - Answer-Ethically debatable cost-driven practices of
companies in their value chain
/.Controversy Case - Answer-Instance or ongoing situation in which company
operations are perceived to have a negative environmental, social, or governance
impact
/.Corporate Reporting Dialogue - Answer-Objective is to drive better alignment of
sustainability reporting frameworks, and promote further integration of non-financial and
financial information
/.Digital Disruption - Answer-Change that occurs when new digital tech and business
models affect the value proposition of existing goods and services
/.Discounted Cash Flow - Answer-View the intrinsic value of a security as the present
value of its expected future cash flows
