CFA ESG - Chapter 1 Questions With Verified Answers

Definition of ESG - Answer is an approach to managing assets where investors explicitly incorporate environmental, social and governance (ESG) factors in their investment decisions with the long-term return of an investment portfolio in mind. ENVIRONMENTAL FACTORS - Answer Factors pertaining to the natural world. These include the use of, and interaction with, renewable and non-renewable resources (e.g. water, minerals, ecosystems and biodiversity). SOCIAL FACTORS - Answer Factors that affect the lives of humans. The category includes the management of human capital, non-human animals, local communities and clients. GOVERNANCE FACTORS - Answer Factors that involve issues tied to countries and/or jurisdictions, or are common practice in an industry; as well as the interest of broader stakeholder groups. Stakeholders - Answer are members of groups without whose support an organisation would cease to exist,1 as well as communities impacted by companies and regulators. corporate sustainability - Answer an approach aiming to create long-term stakeholder value through the implementation of a business strategy that focuses on the ethical, social, environmental, cultural and economic dimensions of doing business philanthropy is comprised of - Answer traditional and venture Traditional Philanthropy focus - Answer Address societal challenges through the provision of grants venture philanthropy focus - Answer Address societal challenges with venture investment approaches social impact investing is comprised of - Answer social investing and impact investment social investing focus - Answer Investment with a focus on social and/or environmental outcome and some expected financial return impact investment focus - Answer Investment with an intent to have a measurable environmental and/or social return ESG investing focus - Answer Enhance long-term value by using ESG factors to mitigate risks and identify growth opportunities fully commercial investment focus - Answer Limited or no regard for ESG practices traditional philanthropy return expectation - Answer social return only venture philanthropy return expectation - Answer social return focused social investing return expectation - Answer social return and sub-market financial return impact investment return expectation - Answer social return and adequate financial market return ESG investing return expectation - Answer financial market return focused on long-term value fully commercial investment return expectation - Answer financial market return only corporate social responsibility - Answer is a broad business concept that describes a company's commitment to conducting its business in an ethical way Effective management of the company's sustainability can (acronym) - Answer F - fines R - regulatory I - innovation E - efficiency S - satisfaction S - society ESG investing is part of a group of approaches collectively referred to as - Answer responsible investment Tripple bottom line was coined by - Answer John Elkinton ESG investing is part of a group of approaches collectively referred to as - Answer responsible investment responsible investment is a - Answer umbrella term for the various ways which ESG can be considered within security selection and portfolio construction Responsible Investment - Answer a strategy and practice to incorporate ESG factors into investment decisions and active ownership socially responsible investment - Answer refers to approaches that apply social and environmental criteria in evaluating companies when it comes to SRI a hurdle is - Answer established for qualification within an investment universe best-in-class investment - Answer Involves selecting only the companies that overcome a defined ranking hurdle, established using ESG criteria within each sector or industry.