SASB LEVEL II: TERMS EXAM
QUESTIONS WITH COMPLETE
ANSWERS
Measures of Variability; Spread - Answer- analyze how dispersed a data set it
(Standard Deviation, Mean absolute deviation (MAD); Minimum and maximum
variables). Help users determine whether or not to normalize the data and improve
analysis of widely dispersed data with effective normalization
Descriptive statistics - measures of central tendency - Answer- help analyze the
average of middle values of a dataset (Mean, Median, Mode)
mean absolute deviation - Answer- the average distance between each data value and
the mean (quartiles, quintiles, deciles, percentiles)
Quantiles - Answer- Divide the distribution into quantiles. Determining thresholds for
good, average, and poor performance in an industry
normal distribution - Answer- A function that represents the distribution of variables as a
symmetrical bell-shaped graph.
-68 percent of values will fall within one standard
deviation of the mean
-95 percent will fall within two standard deviations
-99.7 percent will fall within three standard deviations.
outliers - Answer- sometimes go away when normalize data (ie - by number of cars sold
of revenue) but other times exist for valid reasons and may continue to exist after
normalization. so, important to investigate why data falls outside typical range
Skewness - Answer- a measure of the degree to which a distribution is asymmetrical.
how often values fall above/below average. curve shows a tail on one side of the curve
because more results are concentrated on one end of the performance range
-left tail longer along x-axis = negatively skewed (in picture)
-right longer = positively skewed
-data on the long-tailed end may be company's that are better or worse performance
-caused by:
-underlying financial or operational characteristics of companies (only a few large
players in industry and rest small players)
-industry-wide regulatory conditions; and/or
• data characteristics such as performance floors and ceilings
, Factor's related to a company's operating environment - Answer- -business climate
(competitive drivers, peer behavior, pricing power, technological innovations,
expectations of key stakeholders)
-economic climate (commodity prices; taxes, inflation, interest rates)
-regulatory climate (current regulation, future regulation, fines)
-operating locations (exposure to environmental changes, natural resources, ecosystem
changes)
Two main lenses to evaluate if sustainability topics within standards are relevant -
Answer- 1) internal operating factors (company's main revenue streams and inputs for
value creating)
2)external operating context (business climate, regulatory climate etc)
Who are considered stakeholders - Answer-
Common Contextual Considerations by Sustainability Dimension - Answer- -
Environment: - environmental regulation in operating areas and trends; climate change
trends and projections; environmental attributes of company operations
-Social Capital: shifts in consumer safety, protection, or health regulations; shifts in
social preferences or consumer concerns; human rights and indigenous peoples
regulations
-Human Capital: changes in workforce size or composition; nature of operations;
employee health and safety regulations or standards
-business model & innovation: regulatory developments that could affect demand for
products; environmental and social regulations; sustainability performance/functionality
of existing products; developments in extended producer-responsibility laws
-leadership & governance: competitive nature of a company's market; developments in
process safety regulation; changes in governance and financial regulation; changes to
supply chain standards or regulation
Sustainability Dimensions - Answer- -Environmental
-Social Capital
-Human Capital
-Business Model & Innovation
-Leadership & Governance
Categories of financial impact associated with SASB sustainability issues - Answer- 1)
Revenue and expenses (ex- demand; market share and long term growth; operational
efficiency and cost structure)
2)Assets and liabilities (ex - tangible and intangible assets and liabilities)
3)Cost of capital (Risk) - often impact other channels as well (ex - governance, volatility,
and risk factors)
opportunity metric vs. risk metric - Answer- -higher metric values indicate improved
economic performance, such as revenues, product sales, or employee engagement? =
opportunity
QUESTIONS WITH COMPLETE
ANSWERS
Measures of Variability; Spread - Answer- analyze how dispersed a data set it
(Standard Deviation, Mean absolute deviation (MAD); Minimum and maximum
variables). Help users determine whether or not to normalize the data and improve
analysis of widely dispersed data with effective normalization
Descriptive statistics - measures of central tendency - Answer- help analyze the
average of middle values of a dataset (Mean, Median, Mode)
mean absolute deviation - Answer- the average distance between each data value and
the mean (quartiles, quintiles, deciles, percentiles)
Quantiles - Answer- Divide the distribution into quantiles. Determining thresholds for
good, average, and poor performance in an industry
normal distribution - Answer- A function that represents the distribution of variables as a
symmetrical bell-shaped graph.
-68 percent of values will fall within one standard
deviation of the mean
-95 percent will fall within two standard deviations
-99.7 percent will fall within three standard deviations.
outliers - Answer- sometimes go away when normalize data (ie - by number of cars sold
of revenue) but other times exist for valid reasons and may continue to exist after
normalization. so, important to investigate why data falls outside typical range
Skewness - Answer- a measure of the degree to which a distribution is asymmetrical.
how often values fall above/below average. curve shows a tail on one side of the curve
because more results are concentrated on one end of the performance range
-left tail longer along x-axis = negatively skewed (in picture)
-right longer = positively skewed
-data on the long-tailed end may be company's that are better or worse performance
-caused by:
-underlying financial or operational characteristics of companies (only a few large
players in industry and rest small players)
-industry-wide regulatory conditions; and/or
• data characteristics such as performance floors and ceilings
, Factor's related to a company's operating environment - Answer- -business climate
(competitive drivers, peer behavior, pricing power, technological innovations,
expectations of key stakeholders)
-economic climate (commodity prices; taxes, inflation, interest rates)
-regulatory climate (current regulation, future regulation, fines)
-operating locations (exposure to environmental changes, natural resources, ecosystem
changes)
Two main lenses to evaluate if sustainability topics within standards are relevant -
Answer- 1) internal operating factors (company's main revenue streams and inputs for
value creating)
2)external operating context (business climate, regulatory climate etc)
Who are considered stakeholders - Answer-
Common Contextual Considerations by Sustainability Dimension - Answer- -
Environment: - environmental regulation in operating areas and trends; climate change
trends and projections; environmental attributes of company operations
-Social Capital: shifts in consumer safety, protection, or health regulations; shifts in
social preferences or consumer concerns; human rights and indigenous peoples
regulations
-Human Capital: changes in workforce size or composition; nature of operations;
employee health and safety regulations or standards
-business model & innovation: regulatory developments that could affect demand for
products; environmental and social regulations; sustainability performance/functionality
of existing products; developments in extended producer-responsibility laws
-leadership & governance: competitive nature of a company's market; developments in
process safety regulation; changes in governance and financial regulation; changes to
supply chain standards or regulation
Sustainability Dimensions - Answer- -Environmental
-Social Capital
-Human Capital
-Business Model & Innovation
-Leadership & Governance
Categories of financial impact associated with SASB sustainability issues - Answer- 1)
Revenue and expenses (ex- demand; market share and long term growth; operational
efficiency and cost structure)
2)Assets and liabilities (ex - tangible and intangible assets and liabilities)
3)Cost of capital (Risk) - often impact other channels as well (ex - governance, volatility,
and risk factors)
opportunity metric vs. risk metric - Answer- -higher metric values indicate improved
economic performance, such as revenues, product sales, or employee engagement? =
opportunity
