Chartered SRI Counselor (CSRIC)
According to investors, corporate boards should accurately reflect the demographics of their respective markets. According to the latest US Census, people of African-American, Hispanic, Asian, and American Indian ancestry account for approximately what percent of the U.S. population? A) 40% B) 35% C) 60% D) 50%
A) 40%
A prominent financial firm recently released a mutual fund with Dutch-Shell Oil Company as its largest holding. What question should be asked to ascertain if the fund manager is greenwashing this investment? A) Are the firm voting proxies and shareholder engagement in line with stated sustainable investment goals? B) Does the fund manager offer an impact report within the mutual fund's prospectus? C) To what extent does the fund manager use or rely on third-party research? D) Does the fund manager offer examples of excluded and included investments in the mutual fund?
A) Are the firm voting proxies and shareholder engagement in line with stated sustainable investment goals?
Which of the following can be used by institutional investors to create one large cash deposit that is placed in multiple banks in amounts that qualify for federal deposit insurance? A) Certificate of Deposit Account Registry Service (CDARS) B) the U.S. Treasury Department C) Federal Deposit Insurance Corporation (FDIC) D) Community Development Financial Institutions (CDFIs)
A) Certificate of Deposit Account Registry Service (CDARS)
Which of these are reasons that support financial advisers adapting their practices to sustainable investing? I. The vast majority of investors, especially millennials, have expressed interest in using sustainable investing strategies. II. Many client groups are looking for ways to use their investments to carry on meaningful legacies and lobby for change. III. A sustainable investing strategy is essentially the suitability standard at work, encouraging higher social and ethical standards among investors and advisers. IV. Most global companies are willing to sacrifice long-term growth in order to influence human rights and environmental concerns in the short term. A) I and II B) I, II, and IV C) II and III D) II and IV
A) I and II
Which of these items accurately describes the components of ESG integration? I. ESG integration does not prohibit investment in certain sectors, countries, and companies. II. Immaterial ESG issues do not affect investment decisions. III. ESG integration is recommended for short-term investors. IV. Returns are not sacrificed in order to incorporate ESG integration techniques. V. No major changes are necessary for investment processes and practices in order to incorporate ESG integration. A) I, II, IV, and V B) II, IV, and V C) I, II, III, IV, and V D) I, II, and III
A) I, II, IV, and V
Which of these best describes investment in companies, organizations, and funds with the explicit intention to generate positive social and environmental impact alongside a financial return? A) Impact investing B) Responsible investing C) Socially responsible investing D) Mission-based investing
A) Impact investing
Which one of these statements is not a theme of US SIF's best practice recommendations to money managers? A) Increased number of ESG criteria applied to the integration process B) Greater consistency between ESG practices and public statements C) Greater transparency of ESG integration criteria and processes D) Increase knowledge of ESG integration concepts and practices
A) Increased number of ESG criteria applied to the integration process
Which demographic is being drawn to the stock market because of thematic investing? A) Millennials B) Female investors C) Baby Boomers D) Generation X
A) Millennials
According to The Journal of Sustainable Finance & Investment's meta-analysis, which of these is a true statement regarding their observations on ESG analysis? A) Stocks with high ESG scores have signaled lower earnings volatility. B) Study results showed that prudent sustainability practices have either a negative or neutral influence on investment performance. C) Study results found that companies with robust sustainability practices and policies demonstrated lower performance in their corporate operations as well as corporate cash flows. D) Companies with low ESG scores also tend to have lower cost of capital.
A) Stocks with high ESG scores have signaled lower earnings volatility.
Which of the following is not one of the six key actions described in Andy Green's Making Capital Markets Work for Workers, Investors, and the Public: ESG Disclosure and Corporate Long-Termism? A) The SEC ought to make its audit standards stricter for ESG information than for financial data. B) The SEC should specifically outline what disclosure requirements should be applicable across all corporate sectors. C) The SEC should consider looking to an external organization, or multiple organizations, with expertise in ESG disclosures that have the potential to vary by industry. D) Corporations need to ensure that their board of directors take the appropriate steps to assign internal experts to help with reporting and research on ESG factors.
A) The SEC ought to make its audit standards stricter for ESG information than for financial data.
Which of these events is attributed to the myth that sustainable investing means giving up sizable returns relative to the broader stock market? A) The first socially responsible-labeled mutual funds omitted tobacco companies like Philip Morris, which were notorious for paying high dividends, and any fund that excluded them generally underperformed the market. B) The DOL suggested several times that sustainable investing would be difficult for fiduciaries to justify to their clients, namely since their research suggested that ESG screening would ultimately lead to underperformance. C) Eliminating fossil fuels from investors' portfolios would leave them without any exposure at all to the energy sector and would therefore underperform relative to the S&P 500. D) It took many years for apartheid to be abolished in South Africa, and in that time, investors gave up a lot of returns by divesting from that market.
A) The first socially responsible-labeled mutual funds omitted tobacco companies like Philip Morris, which were notorious for paying high dividends, and any fund that excluded them generally underperformed the market.
Which of the following is not one of the six principles for responsible investment outlined by the United Nations? A) We will work together to enhance and propagate peace in our communities. B) We will seek appropriate disclosure on ESG issues by the entities in which we invest. C) We will be active owners and incorporate ESG issues into our ownership policies and practices. D) We will incorporate environmental, social, and corporate governance (ESG) issues into investment analysis and decision-making processes.
A) We will work together to enhance and propagate peace in our communities.
Which of the following best defines community investing? A) access to credit, equity, and basic banking products that low-income communities otherwise lack B) providing microloan programs for communities in emerging countries C) targeted investments, typically made in private local markets, aimed at solving social or environmental problems D) screening of investments against minimum standards of business practice based on community norms
A) access to credit, equity, and basic banking products that low-income communities otherwise lack
Integrated value considers an appropriate balance of environmental matters, societal matters, and A) economic value. B) governance matters. C) corporate leadership. D) stakeholder considerations.
A) economic value.
Which is not one of the three main investor types suitable for community investing products? A) endowments B) accredited investors C) asset managers D) retail investors
A) endowments
Which of the following is not an attribute of community development loan funds? A) federally insured deposits B) loan loss reserves C) pledging fund's net worth to protect investor losses D) collateralized loans
A) federally insured deposits
According to the International Renewable Energy Agency (IRENA) more than ______ of global power capacity is now based on renewable energy. A) one-third B) one-fourth C) two-thirds D) half
A) one-third
An impact report not only provides a description of how the activity impacts stakeholders but it also A) provides a detailed analysis of how much change took place. B) describes how all parties were affected by the change. C) gives counterbalance to greenwashing impacts. D) provides an analysis of all dollar amounting affected by the change.
A) provides a detailed analysis of how much change took place.
The studies conducted by French researchers Ali Dardour and Jocelyn Husser showed that which of the following ESG factors was not necessarily material for disclosure? A) social B) impact C) environmental D) governance
A) social
All of these are ways in which sustainable financial advisers can neutralize endogenous risk, except A) supporting the buying and selling of derivatives in use of leverage. B) using ESG criteria in analysis. C) supporting and investing directly in sound, well-run companies. D) purchasing investments with the intent of holding them for a long time, not just to make fast money.
A) supporting the buying and selling of derivatives in use of leverage.
All of the following are notable public pension plans known for evaluating ESG issues, except A) the Federal Employees Retirement System (FERS) B) CalPERS C) The New York State Common Retirement Fund D) the Massachusetts and Rhode Island pension funds
A) the Federal Employees Retirement System (FERS)
Which one of the following was not one of the reasons why MSCI downgraded Equifax and removed it from their portfolio? A) the company had not shown sufficient corporate action following the data breach in 2017 B) the company had no employee training or emergency plans to respond to an intrusion C) the company had no evidence of regular cybersecurity audits D) the company was ill-prepared to face the increasing frequency and complexity of data breaches
A) the company had not shown sufficient corporate action following the data breach in 2017
Sustainability-themed investing is best described as A) the selection of assets specifically related to sustainability in single- or multi-themed funds. B) the exclusion of investments that are involved in activities deemed unacceptable or controversial. C) the explicit and systematic inclusion of ESG analysis as part of a broader investment analysis and for investment decision making. D) a broad term that is widely used, particularly within equity investing, but its meaning can differ and will depend upon the individual investor, adviser, or firm.
A) the selection of assets specifically related to sustainability in single- or multi-themed funds.
All of these are elements of proxy voting, except A) those who plan to vote proxies must attend the company's annual meeting in person. B) investment advisers have a fiduciary duty to their clients to vote proxies on behalf of their clients as they would vote. C) casting a ballot by one person or by a firm on behalf of a shareholder/corporation. D) sustainable investing advisers must work with clients to vote their proxies according to guidelines set by the investor.
A) those who plan to vote proxies must attend the company's annual meeting in person.
An example of qualitative analysis for ESG issues in the investment decision-making process might be A) when an analyst uses ESG issues as the determining factor between two companies with otherwise identical valuation and performance metrics. B) when statistic techniques are utilized to identify relationships between ESG factors and ESG scores, as well as future asset price movements and stock fundamentals. C) when credit rating firms use ESG analysis as part of an adjustment to their internal credit assessment. D) when ESG analysis causes analysts to change their forecasted financials, valuation models, and forecasted financial ratios for a company's stock.
A) when an analyst uses ESG issues as the determining factor between two companies with otherwise identical valuation and performance metrics.
What is the minimum level at which a shareholder resolution can be effective? A) without coming to a vote B) two-thirds of the votes cast C) 30% of the votes cast D) majority of the votes cast
A) without coming to a vote
Why is "greenwashing" important to be mindful of when evaluating sustainable mutual funds and ETFs? A) Because investors will want to know how many assets need to be purchased to make their portfolio truly green. B) Because mutual funds and ETFs that call themselves sustainable ought to be able to prove it. C) Because it can alter the risk profile of the entire portfolio. D) Because it is a way to ensure that sustainable mutual funds and ETFs are living up to globally recognized standards.
B) Because mutual funds and ETFs that call themselves sustainable ought to be able to prove it.
All of the following are true statements regarding the capitalistic views of Edward Freeman and Milton Friedman, except A) Friedman believed that companies should ignore externalities that could have a negative impact on stakeholders. B) Freeman believed that without companies, shareholders would cease to exist. C) Freeman believed that it is the responsibility of a company to create value for everyone, not just those who hold the company's stock. D) Friedman believed that companies are compelled to make profits to satisfy their shareholders and continue positive growth.
B) Freeman believed that without companies, shareholders would cease to exist.
Why is it important to research the major holdings of ESG ETFs and mutual funds? A) To determine if the fund manager is guilty of greenwashing B) In order to ascertain the if the investments were included based on ESG criteria C) In order to ascertain if the investments are in alignment with the UN SDGs D) To ensure that proper fundamental analysis was conducted
B) In order to ascertain the if the investments were included based on ESG criteria
According to the US SIF 2022 Trends Report, which of the following had the greatest number of shareholder proposals filed overall? A) Board Diversity B) Labor and Equal Employment Opportunity C) Executive Pay D) Special Meetings
B) Labor and Equal Employment Opportunity
According to the module text, which of these is NOT true regarding the process of determining if ESG issues are material or immaterial? A) A company's goods or services that benefit from ESG trends might mitigate or outweigh the ESG risk associated with its sector. B) Material ESG issues for a company's business that are unrelated to the sector should not be enough to outweigh ESG issues for business lines that are related to the sector. C) A company's strong environmental and social management with good governance might mitigate the ESG risk traditionally associated with its sector. D) ESG issues may actually be firm-specific (i.e., unique to an individual company) and may not be valid for all companies in the same sector.
B) Material ESG issues for a company's business that are unrelated to the sector should not be enough to outweigh ESG issues for business lines that are related to the sector.
According to US SIF, what is the best way to improve the robustness and transparency of ESG integration? A) Money managers should protect their proprietary ESG integration strategy. B) Money managers should take advantage of education and training opportunities in sustainable investing. C) Money managers should create more specific ESG criteria. D) Money managers should not share how they determine which assets are considered to be allocated using ESG criteria.
B) Money managers should take advantage of education and training opportunities in sustainable investing.
According to the module text, which of these best describes the relationship between negative screens and exclusionary strategies? A) Beginning with an exclusionary strategy in mind, the individual investor can then establish a focused list of negative screens to use. B) Negative screens lend themselves to the development of exclusionary strategies, which can be as broad or narrow as the individual investor prefers. C) The terms can be used interchangeably. D) It is generally recommended to use exclusionary screens later in the equity selection process than general negative screens.
B) Negative screens lend themselves to the development of exclusionary strategies, which can be as broad or narrow as the individual investor prefers.
Does an investor need to have religious motivations in order to use an exclusionary screen? A) No, because marginally religious people are generally encouraged to use exclusionary screens for other reasons. B) No, because some investors may want to avoid stocks that go against their personal morals or ethics. C) Yes, because religious investors are forbidden to use any other type of sustainable investment strategy. D) Yes, because religious investors are the only investors who seek to use exclusionary screens.
B) No, because some investors may want to avoid stocks that go against their personal morals or ethics.
Which of the following is not one of the three dimensions of sustainable investing used to categorize investors? A) Values B) Risk C) Impact D) Integration
B) Risk
When considering the development of a sustainability-themed portfolio, if the trend we have identified is increased food consumption in emerging markets, what would be an example of a theme for this portfolio? A) Sustainable farming and agriculture in Nebraska. B) Sustainable alternatives for dairy-consumption in China. C) Meal, Ready-to-Eat (MREs) rations for children in the Sudan. D) Microwavable dinners for urban residents in Russia.
B) Sustainable alternatives for dairy-consumption in China.
Despite the inconsistencies with ESG scores, all of the following are reasons why they are still an important part of investment analysis, except A) For the past few decades, extensive research has validated ESG analysis's positive, measurable impact on investment risk and returns. B) The SEC has mandated that fund managers actively use ESG analysis as part of the broader investment process C) Studies have shown there is a positive relationship between ESG criteria and corporate performance. D) Investors who ignore ESG scores and other intangibles are not getting a full picture of a company's performance and potential.
B) The SEC has mandated that fund managers actively use ESG analysis as part of the broader investment process
Why is it suggested that sustainable investment advisers "get" their clients more so than traditional financial advisers? A) They are much more willing to spend money treating their clients to dinners and events in order to get to know them better. B) They go beyond the basic financial considerations and needs to incorporate client life goals, passions, values, and beliefs into their financial plan. C) They ask far more prying questions than traditional financial advisers. D) They understand the value of maximizing profits for their clients in the shortest time possible.
B) They go beyond the basic financial considerations and needs to incorporate client life goals, passions, values, and beliefs into their financial plan.
Which of the following is not an example of a "needed service" that can be financed by community investing? A) food access B) access to infrastructure development C) affordable housing D) healthy communities
B) access to infrastructure development
Sustainable perspectives on the economy tend to be more _______ in nature than traditional economic growth. A) growth-oriented B) cyclical C) value-oriented D) linear
B) cyclical
"Financialization" was a term coined in the 1980s to describe A) a general reduction of endogenous risk in the market due to financial wealth. B) financial wealth being separated from real wealth or from the production of goods and services. C) an increase in exogenous risk due to events like the Exxon-Valdez oil spill D) the deregulation of the stock market.
B) financial wealth being separated from real wealth or from the production of goods and services.
Sustainable Finance 1.0 aims to refine shareholder value by A) maximizing F. B) maximizing F subject to E and S. C) optimizing S and E subject to F. D) optimizing I.
B) maximizing F subject to E and S.
BlackRock CEO Larry Fink has recently been imploring his fellow chief executive officers to ensure that investing in their companies makes "a positive contribution to society" instead of simply A) using shareholder money to fix unsustainable operations. B) seeking only to deliver profits to shareholders. C) paying corporate executives higher salaries. D) telling the public that they are making society better.
B) seeking only to deliver profits to shareholders.
Chinese businesses are starting to lure foreign investors by requesting that policy makers in China mandate A) that European investors share their ESG disclosure methodology so they can adopt the same practices. B) that all listed companies and bond issuers provide ESG disclosures. C) that there must be an equal non-ESG investment strategy offered alongside any ESG investment strategy. D) that all foreign investors provide ESG disclosures for their firms.
B) that all listed companies and bond issuers provide ESG disclosures.
According to sociologist Mark C. Suchman, legitimacy theory is A) ESG analysis offers a realistic way for companies to demonstrate their accountability to society. B) the generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions. C) it is the responsibility that a company should create value for everyone. D) without shareholders, organizations would cease to exist and would become illegitimate.
B) the generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions.
Although the concept of sustainable investing had been around for many centuries, the largest leaps in strategy occurred during which of the following time frames? A) 1961-1977 B) The 1800s C) 1978 - Present D) 1928 -1960
C) 1978 - Present
Numerous studies have shown that experts in a particular field tend to be in agreement approximately what percentage of the time? A) 100% B) 50% C) 80% D) 60%
C) 80%
Refillables have demonstrated their ability to not only be reused 20 to 40 times, but they also substantially cut plastic waste with a collection rate of about A) 60%. B) 80%. C) 90%. D) 40%.
C) 90%.
Which one of these correctly describes a passive strategy? A) No supervision is required B) Passive strategies are typically riskier than actively managed funds C) A hands-off strategy where one can simply build a portfolio from a "short list" and make adjustments to the portfolio from time to time D) There is typically no designated benchmark to compare performance
C) A hands-off strategy where one can simply build a portfolio from a "short list" and make adjustments to the portfolio from time to time
Which of the following accurately describes the long-term corporate mindset? A) A minority of CEOs view sustainability as a way to gain competitive advantage over their peers and believe that the sustainability reputation of their company is important to a customer's decision to purchase their products. B) The majority of CEOs view sustainability as a way to gain a competitive advantage over their peers, and they are achieving that result. C) A minority of CEOs believe their business is making efforts to address global sustainability challenges. D) The majority of CEOs believe that the sustainability reputation of their company is important to a customer's decision to purchase their products, and are delivering on that promise.
C) A minority of CEOs believe their business is making efforts to address global sustainability challenges.
Which one of these is an example of a well-worded negative screen? A) Invest in companies that have a goal of being 100% free of carbon emissions. B) Do not invest in companies that are not 100% free of carbon emissions. C) Do not invest in companies with more than 10% of revenue from the sale of fossil fuels. D) Invest in companies that promote renewable energy sources.
C) Do not invest in companies with more than 10% of revenue from the sale of fossil fuels.
Which one of the following is the act of taking environmental, community, and societal issues and governance criteria into consideration when developing a portfolio? A) ESG investing B) SRI integration C) ESG integration D) SRI investing
C) ESG integration
Reduced inequalities and responsible consumption and production are examples of which category of the sustainable development goals? A) Social B) Overall C) Economic D) Environmental
C) Economic
Which of these accurately demonstrates the risk of financial impact of neglecting sustainability and ESG issues, as discussed in the section on ESG considerations related to corporate risk? A) Oil companies have paid approximately $90 billion in cleanup costs since 2010. B) The top 10 largest fines and settlements in corporate history together amounted to $58.5 billion. C) Global pharmaceutical companies have paid $30.2 billion in fines since 1991. D) Banks have paid out $147 billion in U.S. legal settlements alone since the start of the financial crisis.
C) Global pharmaceutical companies have paid $30.2 billion in fines since 1991.
Which of these statements is true regarding a "best-in-class" strategy? I. It can also be a passive strategy. II. It is well-positioned to deal with unexpected changes and controversies across industries. III. It is pragmatic and aims at promoting best practices by companies in all industries. IV. It includes divestment from unsustainable industries. A) I, II, III, and IV B) II and III C) I, II, and III D) I and II
C) I, II, and III
Which of these are true of sustainable investing approaches? I. The main types of sustainable investing strategies are best-in-class screening, exclusionary screening, and ESG integration. II. It is not uncommon for a combination of sustainable investing strategies to be implemented at the same time. III. The degree to which sustainable investing strategies are used depends largely on the individual adviser and the type of organization. A) II only B) I only C) II and III D) I, II, and III
C) II and III
Which of these is an appropriate reason for an investment adviser to continue to use ESG analysis, even though the client may not wish to invest in this manner? A) In the future, all investment strategies will require ESG analysis anyway. B) The adviser can properly demonstrate to the client why all of the non-ESG strategies ended up failing. C) Just because a client chooses not to invest using ESG factors does not mean that they are immune to ESG risks. D) Once the client sees how an adviser's other managed portfolios have been performing using ESG analysis, the client may change their mind.
C) Just because a client chooses not to invest using ESG factors does not mean that they are immune to ESG risks.
Which one of these is a product category that is not traditionally lumped with exclusionary screens? A) Wine and beer B) Casinos C) Marijuana D) Cigarettes
C) Marijuana
U.S. Congress passed the _____ Accountability and Divestment Act of 2007 to mirror the successful actions used against South Africa to pressure this country's government to end its human rights abuses. A) Palestine B) Iran C) Sudan D) Myanmar
C) Sudan
Which of the following is not considered a historical example of endogenous risk events? A) The 1987 Stock Market Crash B) The 2008 Financial Crisis C) The Securities Exchange Act of 1934 D) The 1998 Long-Term Capital Market Crisis
C) The Securities Exchange Act of 1934
Which of the following is not a possible reason why a shareholder proposal will be withdrawn before voting? A) In the course of dialogue with the company, the investor hits some common ground. B) The investor files the proposal simply to force the company into a dialogue. C) The company tells the SEC that they promise to implement the investor's proposal. D) The paperwork was not in order or filed on time.
C) The company tells the SEC that they promise to implement the investor's proposal.
Which of the following is NOT one of the more common reasons why financial advisers avoid incorporating sustainable investing strategies and ESG analysis into their practice? A) They believe that implementing sustainable investing strategies will somehow compromise portfolio performance. B) They are hesitant to recommend an ESG product because they are not sure what is considered "good." C) They have biases and prejudices that would prevent them from working with certain types of clients. D) Some advisers believe that implementing sustainable investing strategies is an all-or-nothing commitment.
C) They have biases and prejudices that would prevent them from working with certain types of clients.
Recently, investors have shifted their focus on plastic pollution by asking companies to use less plastic overall, and the results have been good. Which two companies were cited as being part of a broad agreement to cut virgin plastic use by more than 700,000 tons by the year 2025? A) Kroger and Safeway B) Sears and J.C. Penney C) Walmart and Target D) Home Depot and Lowe's
C) Walmart and Target
When considering the five dimensions of impact, an assessment of "well-served" versus "under-served" falls under which analysis? A) How much B) What C) Who D) Contribution
C) Who
In recent years, "SRI" has come to be defined as A) a strategy that ensures that specific ethical practices or religious beliefs are used as a screen for investments. B) investment in companies, organizations, and funds with the explicit intention to generate positive social and environmental impact alongside a financial return, which can range from below market to market rate. C) any investment strategy that seeks to maximize financial return while simultaneously advancing an idea, belief, or philanthropic cause that is important to the individual investor, with the hope of changing the world for the better. D) focuses on investment activities in companies or projects that are committed to conserving natural resources, advancing the production and discovery of alternative energy sources, encouraging the implementation of clean air and water policies, and supporting other business practices that positively impact the
C) any investment strategy that seeks to maximize financial return while simultaneously advancing an idea, belief, or philanthropic cause that is important to the individual investor, with the hope of changing the world for the better.
All of the following are qualities important in the design of a strong social impact report, except A) data visualization B) executive summary C) commentary from beneficiaries D) impact strategy and goals
C) commentary from beneficiaries
According to the steps for thematic investing highlighted by McKinsey, which of the following is not one of the recommendations for developing a themed portfolio? A) consider the trends B) move from trends to themes C) conduct ESG analysis D) develop an investment thesis
C) conduct ESG analysis
As defined in the text, which one of the following is a tactic used to influence a company through shareholder advocacy? A) participating in boycotts B) filing SEC complaints C) filing shareholder resolutions D) conducting phone campaigns
C) filing shareholder resolutions
All of the following are asset classes that include products that can incorporate community investing, except A) fixed income. B) private equity. C) hedge funds. D) cash.
C) hedge funds.
The earliest use of the term "socially responsible investing" is attributed to the Quakers who, at the time, were addressing which social issue? A) drinking B) apartheid C) slavery D) gambling
C) slavery
All of the following are notable events from the 1980s that led to a surge in interest for sustainable investing practices, except A) the Exxon-Valdez oil spill in Alaska. B) the Chernobyl disaster. C) the Civil Rights Movement. D) the anti-apartheid campaign in South Africa.
C) the Civil Rights Movement.
In addition to risk-adjusted return, a sustainability-themed portfolio can linkits performance and impact of the investment theme to A) the performance of the MSCI KLD 400 Index. B) the United Nations' Principles for Responsible Investment (PRI). C) the United Nations' Sustainable Development Goals (SDGs). D) credit union and community bank projects.
C) the United Nations' Sustainable Development Goals (SDGs).
If a shareholder resolution proposal fails to meet the requisite resubmission threshold, how many years must the filer wait to resubmit it? A) one B) two C) three D) four
C) three
Which of the following is a social ESG factor for corporations? A) energy usage B) transparency C) union relationships D) accountability
C) union relationships
Sustainable Finance 3.0 is achieved when which of the UN SDGs have been addressed and optimized? A) Economy B) Partnership for the goals (SDG 17) C) Society D) Biosphere
D) Biosphere
Which of the following is an accurate statement regarding major financial firms and their commitment to sustainability? A) Deutsche Bank has regularly been praised as a leader in appropriately labeling ESG funds. B) Former Blackrock executives fully support all sustainable investment efforts that the firm has undertaken. C) Blackrock and Vanguard have some of the best voting records when it comes to social issues. D) Blackrock, State Street, and Vanguard have hundreds of billions of dollars invested in the worst climate offenders.
D) Blackrock, State Street, and Vanguard have hundreds of billions of dollars invested in the worst climate offenders.
All of the following are highlighted reasons why sustainable investing strategies and ESG analysis are important to clients, the financial services industry, and the world, except A) demographic groups like women and millennials, as well as university endowments and pension plans, are among a few of the many client groups that are looking for a way to carry on meaningful legacies and lobby for change. B) sustainable investing strategies are an important ingredient for restoring trust within the financial services sector. C) many companies and countries are starting to normalize investments that preserve the environment and protect people over maximizing profits. D) ESG analysis has debunked the notion of modern portfolio theory and is expected to replace standard financial analysis on a global scale.
D) ESG analysis has debunked the notion of modern portfolio theory and is expected to replace standard financial analysis on a global scale.
According to the Business and Sustainable Development Commission (BSDC), which of these is not one of the major reasons for achieving the SDGs? A) Reducing income inequality B) Advancing the socioeconomic status of women C) Ending poverty D) Ending racial inequality
D) Ending racial inequality
Which of the following is not one of the three goals that apply to a "full value chain" assessment for climate emission targets? A) Transition to net-zero B) Independent verification C) Specified terms for science-based targets D) Guidelines for shareholder advocacy
D) Guidelines for shareholder advocacy
Which of the following is one of the seven principles that should be considered for any firm with ESG-labeled assets? A) Develop a new integrated process every time an ESG product is released to the public B) Give light consideration to ESG vendors C) Ensure proper governance practices only at the highest levels of the organization D) Have clear criteria for what is meant by an ESG product
D) Have clear criteria for what is meant by an ESG product
Which of the following investors would likely consider negative screens to reflect their lifestyle? I. Religious individuals II. Non-religious individuals III. Vegans IV. Politically active individuals A) III and IV B) II only C) II, III, and IV D) I, II, III, and IV
D) I, II, III, and IV
Which of these would be considered a "threshold" sustainability screen as opposed to a "metric" sustainability screen? A) Include companies with carbon emissions that are 40% of normalized sales B) Include companies who plan to reduce carbon dioxide (CO2) emissions by 1 million metric tons each month C) Include companies that have already demonstrated their commitment to the reduction of carbon emissions by reporting an absolute amount of CO2 emissions in their 10-K D) Include companies whose carbon emissions are below the industry average
D) Include companies whose carbon emissions are below the industry average
What is one of the major reasons that many CEOs fail to implement a sustainability policy on a global scale? A) It is too expensive. B) Their customers are indifferent to sustainability practices. C) ESG disclosures are difficult to implement. D) Most companies are focused on short-term results.
D) Most companies are focused on short-term results.
When it comes to analyzing and considering investments that may have engaged in greenwashing, how should investors ultimately invest their money? A) Only in investments that present enough criteria as to how they are a true ESG product. B) Only where they have enough information about an investment's impact score. C) Only in investments that can 100% prove their commitment to sustainability. D) Only where they consider the answers to their questions satisfactory.
D) Only where they consider the answers to their questions satisfactory.
According to Rostow's five stages of economic growth, when a goods-producing sector is formed and urbanization, industrialization and technological advances all increase, the economy has reached which stage? A) Traditional society B) Drive to maturity C) Preconditions to take-off D) Take-off
D) Take-off
Which of these best describes the role of the asset manager in the ESG process? A) The asset manager analyzes and relays ESG criteria between clients and companies. B) The asset manager waits for the client to determine investment parameters and then seeks out companies to invest in that match those parameters. C) The asset manager develops sustainable portfolios and then seeks investors whose values align with the portfolios that have been developed. D) The asset manager analyzes and relays ESG criteria between clients and companies and engages with corporations on behalf of shareholders and advocacy groups.
D) The asset manager analyzes and relays ESG criteria between clients and companies and engages with corporations on behalf of shareholders and advocacy groups.
When using ESG integration analysis, what is an example of how "company consideration" might show how a company with strong environmental and social management and good governance might mitigate the risk traditionally associated with its sector? A) A large iron-ore company has decided to add the word "green" to their company name to give the impression that they are sustainability focused. B) None of these. C) A mid-sized textile firm has decided to outsource operations to Taiwan. D) The majority female board of directors for an oil company has decided to shift the bulk of their portfolio into renewables; something its direct competitors have been slow to do.
D) The majority female board of directors for an oil company has decided to shift the bulk of their portfolio into renewables; something its direct competitors have been slow to do.
An investor who wishes to not only add an additional dimension of risk analysis but also wishes to ensure that their portfolio reflects their own viewpoints and beliefs falls under which part of the sustainable investing investor framework? A) Impact B) Risk C) Integration D) Values
D) Values
Which of the following is not a component of triple-bottom-line investing? A) a company's social responsibility B) a company's impact on the environment C) a company's economic value D) a company's political activism
D) a company's political activism
Which of the following is not one of the seven essential components of the impact reporting checklist? A) triangulation with other data B) focus on balance C) analysis of credibility D) a description of shareholder involvement
D) a description of shareholder involvement
Which of the following is not a major way in which sustainability through the integration of ESG considerations into a corporate structure can lead to a competitive advantage? A) risk B) performance C) reputation D) accountability
D) accountability
Which of the following is not a criterion of ESG screening? A) environmental B) social C) governance D) corporate engagement
D) corporate engagement
Which is not one of the three notable ESG disclosure requirements currently in the works for the Securities and Exchange Commission (SEC)? A) climate risk B) regulation S-K C) political spending D) executive bonuses
D) executive bonuses
A moral hazard, like "Too-Big-To-Fail," occurs when an institution or individual A) is subjected to an increase in risk, which then results in a change in behavior. B) is insulated from risk, but does not change overall behavior. C) is subjected to an increase in risk, but does not change overall behavior. D) is insulated from risk, which then results in a change in behavior.
D) is insulated from risk, which then results in a change in behavior.
All of the following are examples of risks that can be mitigated as part of a firm's sustainability strategy, except A) lower reputational risk B) lower risk of litigation C) decreased volatility of cash flows D) lower exogenous risks
D) lower exogenous risks
According to Eurosif, all of the following items are part of the best-in-class strategy cycle, except A) micro analysis of stakeholders and management B) continuous dialogue and corporate engagement C) macro analysis of exposure to global sustainability trends D) research reports and sustainability scores
D) research reports and sustainability scores
According to Principles for Responsible Investment (PRI), which of the following is not one of the five major areas of analysis for ESG integration? A) financial reports B) valuation tools C) economic analysis D) sector analysis
D) sector analysis
The Islamic Finance Stability Board forecasts that _________ assets are expected to surge in popularity in the coming years. A) riba B) halal C) impact investing D) shariah-law compliant
D) shariah-law compliant
All of the following are true regarding the UN Sustainable Development Goals (SDGs) except A) there are 17 goals with 169 sub-targets and 232 indicators. B) they aim to create a better world by the year 2030. C) they were preceded by the Millennium Development Goals (MDGs). D) they are formally implemented by governments.
D) they are formally implemented by governments.
According to Rostow's five stages of economic growth, when humans are sustained by a basic sector economy with hunting, gathering, limited technology, limited class systems, and no centralized government, this is known as A) drive to maturity. B) the search for purpose. C) the search for quality. D) traditional society.
D) traditional society.
