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CFA Institute Certificate in ESG Investing Sample Questions (Q583-Q588):
NEW QUESTION # 583
The Sustamalytics database is most likely used for:
- A. company ESG assessment.
- B. manager ESG assessment
- C. creating an ESG benchmark
Answer: A
Explanation:
The Sustainalytics database is primarily used for company ESG assessment. Here's a detailed explanation:
* Company ESG Assessment:
* Sustainalytics provides detailed ESG ratings and research for individual companies. Their assessments cover various ESG risks and opportunities that companies face, and these ratings are used by investors to evaluate the ESG performance of companies.
* The database includes ESG Risk Ratings that measure the degree to which a company's economic value is at risk due to ESG factors. These ratings help investors integrate ESG considerations into their investment processes.
CFA ESG Investing References:
* The CFA Institute's ESG curriculum highlights the role of Sustainalytics in providing comprehensive ESG assessments of companies. These assessments are crucial for investors looking to incorporate ESG factors into their investment decisions.
NEW QUESTION # 584
The European Union (EU) Ecolabel:
- A. is the official EU voluntary label for environmental excellence
- B. targets explicit claims made on a voluntary basis by businesses towards consumers
- C. flags products that have a guaranteed, independently verified, high environmental impact
Answer: A
Explanation:
The European Union (EU) Ecolabel is the official EU voluntary label for environmental excellence.
EU Ecolabel Overview: The EU Ecolabel is a recognized certification that indicates a product or service has a reduced environmental impact throughout its lifecycle.
Voluntary Participation: Businesses can voluntarily apply for this label, demonstrating their commitment to environmental excellence and compliance with rigorous environmental criteria set by the EU.
Consumer Trust: The label helps consumers identify products and services that are environmentally friendly and meet high environmental standards, promoting sustainable consumption.
CFA ESG Investing Reference:
The CFA Institute's discussions on environmental labels and certifications highlight the role of the EU Ecolabel as a voluntary but stringent standard for environmental excellence, helping consumers and investors make informed, sustainable choices.
NEW QUESTION # 585
In governance analysis, a threshold assessment best describes a minimum:
- A. level of confidence about future earnings.
- B. level of stewardship dialogue with the company.
- C. criterion before making an investment.
Answer: C
Explanation:
A threshold assessment refers to setting a minimum criterion for governance practices that must be met before considering an investment in a company. (ESGTextBook[PallasCatFin], Chapter 5, Page 259)
NEW QUESTION # 586
In Japan, additional statutory auditors are individually appointed by the:
- A. Regulatory body
- B. Shareholders
- C. Risk committee
Answer: B
Explanation:
In Japan, shareholders appoint additional statutory auditors. This ensures that the auditors are independent from management and aligned with shareholder interests, which is crucial for maintaining effective corporate governance and transparency.ESG Reference: Chapter 5, Page 231 - Governance Factors in the ESG textbook.
NEW QUESTION # 587
Which of the following actors most likely engage with investee companies to improve their ESG performance?
- A. Fund labellers
- B. Asset managers
- C. Investment platforms
Answer: B
Explanation:
Asset managers actively engage with investee companiestoimprove ESG performance through stewardship, proxy voting, and direct engagement.
* Fund labellers (A) certify funds but do not engage.
* Investment platforms (C) provide access but do not influence corporate ESG strategy.
References:
* Principles for Responsible Investment (PRI) Stewardship Best Practices
* CFA Institute Active Ownership & ESG Integration Report
* MSCI ESG Engagement Framework
NEW QUESTION # 588
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