ESG CFA Certificate Practice Questions
& Answers 100% Correct!!
Which of the following investment approaches focuses on enhancing the long-term
value of an investment portfolio?
a. ESG investing
b. Impact investing
c. Conventional financial investing - ANSWERSA
Which of the following ESG investments addresses the bottom of the pyramid (BOP)?
a. Green bonds
b. Micro-finance bonds
c. Fund investing in smart grid technology - ANSWERSB
The "core planetary boundaries" identified by the Stockholm Resilience Centre are:
a. biosphere integrity and climate change.
b. climate change and land-system change.
c. biosphere integrity and land-system change. - ANSWERSA
ESG integration can have a material financial impact on a company, resulting in:
a. reduced costs.
b. reduced efficiency.
c. increased negative externalities. - ANSWERSA
Which of the following statements regarding externalities is most accurate?
a. Externalities can be due to environmental or social factors.
b. When externalities are positive, private costs are lower than societal costs.
c. Internalization of externalities does not affect companies' financial performance. -
ANSWERSA
Which of the following is a minimum requirement for signatories to the Principles of
Responsible Investment (PRI)? Members must:
a. be active owners in the companies in which they are invested.
b. seek appropriate disclosure on ESG issues by the investee companies.
c. have senior-level commitment and accountability mechanisms for responsible
investment implementation. - ANSWERSC
Which of the following organizations developed a toolkit for establishing long-term,
sustainable investment mandates?
a. Principles of Responsible Investment (PRI)
b. International Corporate Governance Network (ICGN)
c. University of Cambridge Institute for Sustainability Leadership - ANSWERSC
, Which of the following statements is most accurate? The majority of studies suggest
that:
a. good ESG standards increase the cost of capital for a company.
b. ESG performance and investment fund performance are positively correlated.
c. ESG performance and corporate financial performance are positively correlated -
ANSWERSC
Greenwashing refers to:
a. countries exporting hazardous waste to other countries.
b. companies making misleading claims about their environmental practices.
c. companies introducing substances into the environment that are harmful. -
ANSWERSB
The ESG reporting framework used by the United Nations Global Compact signatories
is published by the:
a. Global Reporting Initiative (GRI)
b. Value Reporting Foundation (VRF).
c. International Business Council (IBC). - ANSWERSA
Which of the following asset classes has the lowest allocation of global sustainable
investing assets?
a. Real estate
b. Public equity
c. Fixed income - ANSWERSA
Asset managers:
a. include pension funds and sovereign wealth funds.
b. are not the counterparty to investment transactions.
c. have legal ownership of the assets under management. - ANSWERSB
Which of the following parties holds the ultimate fiduciary responsibility in a pension
fund? The pension fund:
a. Trustees
b. Auditors
c. Executives - ANSWERSA
Which of the following established a framework that states conditions for an economic
activity to be considered environmentally sustainable?
a. EU Taxonomy Regulation
b. Climate Disclosure Standards Board
c. Task Force on Climate-Related Financial Disclosures - ANSWERSA
Which role do insurance companies most likely undertake?
a. Asset owners
b. Intermediaries
c. Asset managers - ANSWERSA
& Answers 100% Correct!!
Which of the following investment approaches focuses on enhancing the long-term
value of an investment portfolio?
a. ESG investing
b. Impact investing
c. Conventional financial investing - ANSWERSA
Which of the following ESG investments addresses the bottom of the pyramid (BOP)?
a. Green bonds
b. Micro-finance bonds
c. Fund investing in smart grid technology - ANSWERSB
The "core planetary boundaries" identified by the Stockholm Resilience Centre are:
a. biosphere integrity and climate change.
b. climate change and land-system change.
c. biosphere integrity and land-system change. - ANSWERSA
ESG integration can have a material financial impact on a company, resulting in:
a. reduced costs.
b. reduced efficiency.
c. increased negative externalities. - ANSWERSA
Which of the following statements regarding externalities is most accurate?
a. Externalities can be due to environmental or social factors.
b. When externalities are positive, private costs are lower than societal costs.
c. Internalization of externalities does not affect companies' financial performance. -
ANSWERSA
Which of the following is a minimum requirement for signatories to the Principles of
Responsible Investment (PRI)? Members must:
a. be active owners in the companies in which they are invested.
b. seek appropriate disclosure on ESG issues by the investee companies.
c. have senior-level commitment and accountability mechanisms for responsible
investment implementation. - ANSWERSC
Which of the following organizations developed a toolkit for establishing long-term,
sustainable investment mandates?
a. Principles of Responsible Investment (PRI)
b. International Corporate Governance Network (ICGN)
c. University of Cambridge Institute for Sustainability Leadership - ANSWERSC
, Which of the following statements is most accurate? The majority of studies suggest
that:
a. good ESG standards increase the cost of capital for a company.
b. ESG performance and investment fund performance are positively correlated.
c. ESG performance and corporate financial performance are positively correlated -
ANSWERSC
Greenwashing refers to:
a. countries exporting hazardous waste to other countries.
b. companies making misleading claims about their environmental practices.
c. companies introducing substances into the environment that are harmful. -
ANSWERSB
The ESG reporting framework used by the United Nations Global Compact signatories
is published by the:
a. Global Reporting Initiative (GRI)
b. Value Reporting Foundation (VRF).
c. International Business Council (IBC). - ANSWERSA
Which of the following asset classes has the lowest allocation of global sustainable
investing assets?
a. Real estate
b. Public equity
c. Fixed income - ANSWERSA
Asset managers:
a. include pension funds and sovereign wealth funds.
b. are not the counterparty to investment transactions.
c. have legal ownership of the assets under management. - ANSWERSB
Which of the following parties holds the ultimate fiduciary responsibility in a pension
fund? The pension fund:
a. Trustees
b. Auditors
c. Executives - ANSWERSA
Which of the following established a framework that states conditions for an economic
activity to be considered environmentally sustainable?
a. EU Taxonomy Regulation
b. Climate Disclosure Standards Board
c. Task Force on Climate-Related Financial Disclosures - ANSWERSA
Which role do insurance companies most likely undertake?
a. Asset owners
b. Intermediaries
c. Asset managers - ANSWERSA
