ESG Analysis, Valuation and Integration 2
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Questions and Answers

What does a quantitative approach have to consider when dealing with missing data?

  • The engagement of the company
  • The strength of environmental accounting
  • The disclosure of carbon intensity
  • The materiality of the missing information (correct)

    • What might be a red flag for an analyst to recommend any investment?

  • The strength of environmental accounting
  • The hiring of a new CEO
  • Insufficient detail on long-term incentive plans (correct)
  • A lack of disclosure on carbon intensity

    • Which of the following factors were considered in the G factors?

  • Economic growth
  • Health spending
  • Political stability (correct)
  • Population size

    • Why did the investor judge Russia's social aspect to be unfavorable in the long term?

    <p>Unfavorable demographics profile</p> Signup and view all the answers

    Which factor(s) are considered when weighting the remaining companies in the portfolio?

    <p>All of the above</p> Signup and view all the answers

    How often are the calculations performed and the portfolio adjusted?

    <p>Once a quarter</p> Signup and view all the answers

    What program could be implemented for companies not meeting the specified environmental criteria?

    <p>Stewardship program</p> Signup and view all the answers

    What does the fund manager consider when adjusting the target multiples on ratio analysis?

    <p>Discount or premium and discount rate</p> Signup and view all the answers

    Which of the following is a key factor considered in the quantitative systematic approach to the environmental tilted mandate in global equities?

    <p>The use of at least two third-party ESG scoring systems</p> Signup and view all the answers

    Which of the following is NOT a rule or factor considered in the quantitative systematic approach to the environmental tilted mandate in global equities?

    <p>The use of at least two third-party ESG scoring systems</p> Signup and view all the answers

    Which type of companies are deemed ineligible for the fund in the quantitative systematic approach to the environmental tilted mandate in global equities?

    <p>Companies that score below the minimum threshold on the scorecard approach</p> Signup and view all the answers

    What is the primary objective of the foundation endowment in the quantitative systematic approach to the environmental tilted mandate in global equities?

    <p>To fund climate science</p> Signup and view all the answers

    What type of assessments are performed in addition to the DCF scenario analysis?

    <p>Sum-of-the-parts assessments</p> Signup and view all the answers

    What are some of the factors considered in the credit analysis of a corporate bond?

    <p>Market position and competitive profile</p> Signup and view all the answers

    What is the purpose of the quantitative score in the ESG analysis of a company?

    <p>To aggregate metrics from ESG research providers and third-party sources</p> Signup and view all the answers

    What is the role of the board of directors in overseeing sustainability initiatives?

    <p>They formally oversee sustainability initiatives</p> Signup and view all the answers

    What is the purpose of the quantitative ESG (QESG) score?

    <p>To assess a company's overall ESG performance</p> Signup and view all the answers

    Why was the ESG score of the state-owned oil producer upgraded in the case study?

    <p>The company improved its worker safety</p> Signup and view all the answers

    How does the investor in the sovereign debt analysis case study assess a country's financial stability?

    <p>By reviewing the country's ESG factors</p> Signup and view all the answers

    What factors did the investor evaluate to gauge the risks associated with attracting and retaining talent?

    <p>Average employee wage and industry position</p> Signup and view all the answers

    What are the four areas in which the Global Equities team aims to invest only in companies that perform strongly?

    <p>Business model, market share opportunity, end-market growth, and ESG</p> Signup and view all the answers

    What is an example of an ESG opportunity identified by the Global Equities team?

    <p>Data analytics business</p> Signup and view all the answers

    Which factor might an analyst consider when judging the materiality of missing information?

    <p>The analyst's personal opinion on the industry's carbon intensity</p> Signup and view all the answers

    What might be a reason for an analyst to red flag an investment completely?

    <p>The company's lack of disclosure on long-term incentive plans for management</p> Signup and view all the answers

    Which factors were considered in the FSS score for Russia?

    <p>Regulatory quality, rule of law, control of corruption</p> Signup and view all the answers

    What indexes were used to judge social capital strength in Russia?

    <p>A life expectancy index, an education index, and a human development index</p> Signup and view all the answers

    What was the overall FSS score given to Russia?

    <p>-4</p> Signup and view all the answers

    Which team is responsible for developing the quantitative ESG (QESG) score for a company?

    <p>Central ESG/responsibility team</p> Signup and view all the answers

    What were the specific improvements in the company's ESG factors that led to the upgrade of its ESG score?

    <p>Improvement in worker safety and reduction in sulfur oxide emissions</p> Signup and view all the answers

    Which of the following is NOT a key operational risk to Company Z?

    <p>The potential for changes in regulations that could impact the company's operations</p> Signup and view all the answers

    What is the purpose of the proprietary scoring system in the quantitative systematic approach to an environmental tilted mandate in global equities?

    <p>To combine with the third-party scores for a comprehensive evaluation</p> Signup and view all the answers

    What are the key factors considered by the fund manager in the quantitative systematic approach to an environmental tilted mandate in global equities?

    <p>Material environmental risks and opportunities</p> Signup and view all the answers

    Which of the following is true about the rebalancing frequency in the quantitative systematic approach to an environmental tilted mandate in global equities?

    <p>It is done quarterly</p> Signup and view all the answers

    Which of the following is NOT a strength of the examined beverages company's ESG profile?

    <p>No significant challenges seen</p> Signup and view all the answers

    What is a material issue for the beverages sector mentioned in the text?

    <p>Lack of water affecting crop yields and prices</p> Signup and view all the answers

    What is the preferred method of modeling used by the team for a company-specific assessment?

    <p>DCF and explicit model scenarios for sales, margins, and asset turns</p> Signup and view all the answers

    What does the credit investor evaluate when analyzing a corporate bond for investment?

    <p>All of the above</p> Signup and view all the answers

    Which of the following factors did the investor evaluate to gauge the risks associated with attracting and retaining talent?

    <p>Employee turnover and compensation</p> Signup and view all the answers

    What does the Global Equities team aim to invest only in companies that perform strongly in?

    <p>Business model, market share opportunity, end-market growth, and management and ESG</p> Signup and view all the answers

    What were the elements considered superior to those of the company's competitors in terms of its sustainable business model?

    <p>Positioning as enabling smaller, faster, and more energy-efficient electronics; customer-centric approach of providing aftermarket enhancements and refurbishments; culture of innovation and collaboration</p> Signup and view all the answers

    What did the team identify as ESG risks for a leading health care insurer and a health care cost management and IT provider?

    <p>Privacy data breaches</p> Signup and view all the answers

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