SASB FSA Exam Level I
SASB FSA Exam Level I Questions and
Answers
Question 1
1987 Bruntland Report
Correct Answer
Sought to define 'sustainable development' to inform global policy in response to
growing concern for the environmental and social problems associated with a rising
standard of living and the global population in the 1980s.
Question 2
Common sustainability directive
Correct Answer
Actions and decisions made today must not threaten our ability to function and
thrive in the future.
Question 3
Sustainability information
Correct Answer
Information about companies' environmental, social and governance matters that
effect financial performance but are not traditionally captured in financial reports
Question 4
Why do institutional investors demand sustainability information?
Correct Answer
To improve fundamental performance, manage risk and volatility to protect against
diminished returns and, in some cases, achieve above-market returns.
Page 1 of 77
, SASB FSA Exam Level I
Question 5
Benefits for companies focused on sustainability
Correct Answer
Reduced costs, improved worker productivity, mitigated risk potential, and created
revenue-generating opportunities
Question 6
Price volatility
Correct Answer
Important to investors when assessing risk and the predictability of investment
outcomes.
Has been shown to help avoid major losses.
Investors in public companies increasingly rely on sustainability information to
support risk analysis, to identify signals of future volatility and value declines and to
protect portfolio value.
Question 7
Private equity investors
Correct Answer
ESG investing as a means to improve portfolio performance, mitigate risk and
generate alpha.
It is limited in private markets due to the less transparent nature of reported data
and corporate value in private markets.
Page 2 of 77
, SASB FSA Exam Level I
Question 8
Internal company demand for sustainability information
Correct Answer
Sustainability data can help provide insight into financial performance and
contribute to success in the near, medium and long term.
Can impact access to and cost of capital.
Directly inform strategic decisions, drive financial performance and foster long-term
success.
Question 9
Action Plan for Financial Sustainable Growth (European Commission)
Correct Answer
10 key initiatives distributed among three core categories: 'reorienting capital flows
towards a more sustainable economy,' 'mainstreaming sustainability into risk
management' and 'fostering trans- parency and long-termism.'
Question 10
Why do investors demand quality sustainability information?
Correct Answer
Meet their investment goals.
Achieve above-market returns, assessing risk to protect against diminished returns
and major losses, or evaluating the predictabil- ity of investment outcomes.
Page 3 of 77
, SASB FSA Exam Level I
Question 11
What factors drive demand for quality sustainability information within companies?
Correct Answer
Can contribute to company success in the near, medium and long term by
improving the management of sustainability-related risks and opportunities.
Companies may be better equipped to identify and mitigate risks, reduce costs,
optimize efficiencies and even increase market share and revenue growth through
new products and services.
Leverage sustainability disclosure to effectively communicate with investors and
improve cost of capital.
Driven by the goal of improving bottom-line performance.
Question 12
Besides companies and their investors, what other institutions influence demand for
sustainability information across capital markets?
Correct Answer
International, national and local policy-based initiatives stimulate sustainability
disclosure by passing recommendations and guidance, as well as regulatory
requirements, for the disclosure of sustainability information from publicly listed
companies.
Non-policy efforts, particularly those initiated by securities exchanges and industry
associations, increasingly encourage sustainability disclosure among listees and
members.
Question 13
What led to the Great Depression?
Correct Answer
The New York Stock Exchange crashed largely due to fraudulent investment
practices, declines in consumer demand, misguided economic policy and over-
extended credit, as well as other factors.
Page 4 of 77
SASB FSA Exam Level I Questions and
Answers
Question 1
1987 Bruntland Report
Correct Answer
Sought to define 'sustainable development' to inform global policy in response to
growing concern for the environmental and social problems associated with a rising
standard of living and the global population in the 1980s.
Question 2
Common sustainability directive
Correct Answer
Actions and decisions made today must not threaten our ability to function and
thrive in the future.
Question 3
Sustainability information
Correct Answer
Information about companies' environmental, social and governance matters that
effect financial performance but are not traditionally captured in financial reports
Question 4
Why do institutional investors demand sustainability information?
Correct Answer
To improve fundamental performance, manage risk and volatility to protect against
diminished returns and, in some cases, achieve above-market returns.
Page 1 of 77
, SASB FSA Exam Level I
Question 5
Benefits for companies focused on sustainability
Correct Answer
Reduced costs, improved worker productivity, mitigated risk potential, and created
revenue-generating opportunities
Question 6
Price volatility
Correct Answer
Important to investors when assessing risk and the predictability of investment
outcomes.
Has been shown to help avoid major losses.
Investors in public companies increasingly rely on sustainability information to
support risk analysis, to identify signals of future volatility and value declines and to
protect portfolio value.
Question 7
Private equity investors
Correct Answer
ESG investing as a means to improve portfolio performance, mitigate risk and
generate alpha.
It is limited in private markets due to the less transparent nature of reported data
and corporate value in private markets.
Page 2 of 77
, SASB FSA Exam Level I
Question 8
Internal company demand for sustainability information
Correct Answer
Sustainability data can help provide insight into financial performance and
contribute to success in the near, medium and long term.
Can impact access to and cost of capital.
Directly inform strategic decisions, drive financial performance and foster long-term
success.
Question 9
Action Plan for Financial Sustainable Growth (European Commission)
Correct Answer
10 key initiatives distributed among three core categories: 'reorienting capital flows
towards a more sustainable economy,' 'mainstreaming sustainability into risk
management' and 'fostering trans- parency and long-termism.'
Question 10
Why do investors demand quality sustainability information?
Correct Answer
Meet their investment goals.
Achieve above-market returns, assessing risk to protect against diminished returns
and major losses, or evaluating the predictabil- ity of investment outcomes.
Page 3 of 77
, SASB FSA Exam Level I
Question 11
What factors drive demand for quality sustainability information within companies?
Correct Answer
Can contribute to company success in the near, medium and long term by
improving the management of sustainability-related risks and opportunities.
Companies may be better equipped to identify and mitigate risks, reduce costs,
optimize efficiencies and even increase market share and revenue growth through
new products and services.
Leverage sustainability disclosure to effectively communicate with investors and
improve cost of capital.
Driven by the goal of improving bottom-line performance.
Question 12
Besides companies and their investors, what other institutions influence demand for
sustainability information across capital markets?
Correct Answer
International, national and local policy-based initiatives stimulate sustainability
disclosure by passing recommendations and guidance, as well as regulatory
requirements, for the disclosure of sustainability information from publicly listed
companies.
Non-policy efforts, particularly those initiated by securities exchanges and industry
associations, increasingly encourage sustainability disclosure among listees and
members.
Question 13
What led to the Great Depression?
Correct Answer
The New York Stock Exchange crashed largely due to fraudulent investment
practices, declines in consumer demand, misguided economic policy and over-
extended credit, as well as other factors.
Page 4 of 77
