Bloomberg ESG Certification - Introduction to ESG
and Sustainable Finance Questions & Answers |
Updated
/. Why do traditional valuation models, like discounted cash flow, fail at capturing the full
range of risks companies face today? Choose one.
A. They do not consider compliance risk.
B. They offer limited, deterministic and potentially misleading insights.
C. They are outdated.
D. They do not consider reputational risk.
Explanation : Traditional valuation models. like discounted
cash flow, do not take into account environmental
social and governance factors and therefore offer
limited, deterministic and potentially misleading
insights.
This is because companies with poor ESG metric
scores will likely have a higher risk profile on
average
Due to this, when using discounted cash flow
analysis one could argue for using a higher
discount rate (resulting in a lower valuation) in
the discounted cash flow.
/.A term closely related to sustainability reporting
that refers to the measuring of environmental
and social performance along with economic
performance. This is broken down into what is
called the "3 Ps": Profit, People and the Planet.
A. Sustainability Reporting
B. Corporate Social Responsibility
C. Sustainability Externality
D. Triple Bottom Line
Explanation : Triple Bottom Line is a term closely related to sustainability reporting that
refers to the measuring of environmental and social performance along with economic
performance. This is broken down into what is called the "3 Ps": Profit, People and the
Planet.
/.A management concept whereby companies
integrate environmental and social concerns
into their business. Companies aim to contribute
, to the well-being of the communities they affect
and on which they depend.
A. Sustainability Reporting
B. Corporate Social Responsibility
C. Sustainability
D. Triple Bottom Line
E. Externality
Explanation : Corporate Social Responsibility is a management concept whereby
companies integrate environmental and social concerns into their business.
/.Refers to the positive or negative effects on
third parties arising from manufacturing and
consuming goods and services. Ideally, the
negative effects of economic transitions on
third parties should be reduced.
A. Sustainability Reporting
B. Corporate Social Responsibility
C. Sustainability
D. Externality
E. Triple Bottom Line
Explanation : Externality refers to the positive or negative effects on third parties arising
from manufacturing and consuming goods and services. Ideally, the negative effects of
economic transitions on third parties should be reduced.
/.Refers to companies' public disclosure of
non-financial performance to communicate
their impact, both positive and negative, on the
environment and people.
A. Sustainability Reporting
B. Corporate Social Responsibility
C. Sustainability
D. Triple Bottom Line
E. Externality
Explanation : Sustainability Reporting refers to companies' public disclosure of non-
financial performance to communicate their impact, both positive and negative, on the
environment and people.
/.Refers to investment decisions that take into account the environmental, social, and
governance (ESG) factors of an economic activity or project. It is the intersection
between the economy, social realities, and environmental health.
A. Sustainability Reporting
B. Corporate Social Responsibility
C. Sustainability
D. Triple Bottom Line
E. Externality
Explanation : Sustainability refers to investment decisions that take into
and Sustainable Finance Questions & Answers |
Updated
/. Why do traditional valuation models, like discounted cash flow, fail at capturing the full
range of risks companies face today? Choose one.
A. They do not consider compliance risk.
B. They offer limited, deterministic and potentially misleading insights.
C. They are outdated.
D. They do not consider reputational risk.
Explanation : Traditional valuation models. like discounted
cash flow, do not take into account environmental
social and governance factors and therefore offer
limited, deterministic and potentially misleading
insights.
This is because companies with poor ESG metric
scores will likely have a higher risk profile on
average
Due to this, when using discounted cash flow
analysis one could argue for using a higher
discount rate (resulting in a lower valuation) in
the discounted cash flow.
/.A term closely related to sustainability reporting
that refers to the measuring of environmental
and social performance along with economic
performance. This is broken down into what is
called the "3 Ps": Profit, People and the Planet.
A. Sustainability Reporting
B. Corporate Social Responsibility
C. Sustainability Externality
D. Triple Bottom Line
Explanation : Triple Bottom Line is a term closely related to sustainability reporting that
refers to the measuring of environmental and social performance along with economic
performance. This is broken down into what is called the "3 Ps": Profit, People and the
Planet.
/.A management concept whereby companies
integrate environmental and social concerns
into their business. Companies aim to contribute
, to the well-being of the communities they affect
and on which they depend.
A. Sustainability Reporting
B. Corporate Social Responsibility
C. Sustainability
D. Triple Bottom Line
E. Externality
Explanation : Corporate Social Responsibility is a management concept whereby
companies integrate environmental and social concerns into their business.
/.Refers to the positive or negative effects on
third parties arising from manufacturing and
consuming goods and services. Ideally, the
negative effects of economic transitions on
third parties should be reduced.
A. Sustainability Reporting
B. Corporate Social Responsibility
C. Sustainability
D. Externality
E. Triple Bottom Line
Explanation : Externality refers to the positive or negative effects on third parties arising
from manufacturing and consuming goods and services. Ideally, the negative effects of
economic transitions on third parties should be reduced.
/.Refers to companies' public disclosure of
non-financial performance to communicate
their impact, both positive and negative, on the
environment and people.
A. Sustainability Reporting
B. Corporate Social Responsibility
C. Sustainability
D. Triple Bottom Line
E. Externality
Explanation : Sustainability Reporting refers to companies' public disclosure of non-
financial performance to communicate their impact, both positive and negative, on the
environment and people.
/.Refers to investment decisions that take into account the environmental, social, and
governance (ESG) factors of an economic activity or project. It is the intersection
between the economy, social realities, and environmental health.
A. Sustainability Reporting
B. Corporate Social Responsibility
C. Sustainability
D. Triple Bottom Line
E. Externality
Explanation : Sustainability refers to investment decisions that take into
