Question 1

Corporate disclosures in line with the recommendations of the Corporate Sustainability Reporting Directive (CSRD) are a regulatory requirement for companies in:

Options :

A : the EU only

B : the UK only

C : both the EU and the UK

Answer: A

Question 2

The Principles for Responsible Investment (PRI) provide guidance on incorporating ESG factors into fixed-income investing, including effective engagement strategies. According to the PRI framework, which factors should investors primarily consider when prioritizing companies for engagement activities?

Options :

A : high ESG scores

B : size of the holding

C : high credit quality issuers

Answer: B

Question 3

A company’s emission reduction commitments are best evaluated using:

Options :

A : Scope 3 emissions.

B : science-based targets.

C : financial modelling of material environmental factors.

Answer: B

Question 4

Historically, some investment consultants and advisers have expressed reservations about the merits of sustainable investing. Which of the following arguments has been a common point of criticism regarding ESG integration within the advisory industry?

Options :

A : They perceive a general lack of interest among asset owners and investors for responsible investments

B : They cannot adhere to the fiduciary duty and invest in responsible investments at the same time

C : Studies have shown that asset owners are more likely to care about the risk factors associated with responsible investments

Answer: A

Question 5

While proponents highlight the benefits of integrating Environmental, Social, and Governance (ESG) considerations into investment analysis, skeptics raise valid concerns. Which of the following criticisms of ESG integration is the least likely to be substantiated by research or practical observations?

Options :

A : ESG funds are too inclusive of poorly performing companies

B : Strong evidence proves the benefits of ESG factors in terms of financial returns

Answer: B

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