2 CFA ENVIRONMENTAL, SOCIAL, AND GOVERNANCE ISSUES IN INVESTING A Guide for Investment Professionals

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Questions and Answers

Which method of ESG considerations involves avoiding securities of companies or countries based on traditional moral values and standards and norms?

  • Exclusionary screening (correct)
  • Thematic investing
  • Active ownership
  • Best-in-class selection

Which method of ESG considerations focuses on selecting the best companies within each industry based on their ESG performance?

  • Impact investing
  • ESG integration
  • Thematic investing (correct)
  • Exclusionary screening

Which method of ESG considerations involves actively engaging with companies to influence their ESG practices?

  • Impact investing
  • ESG integration
  • Best-in-class selection
  • Active ownership (correct)

Which regulatory act in the United States mandates say-on-pay votes for executive compensation?

<p>Dodd-Frank Act (C)</p> Signup and view all the answers

What percentage of shareholders approved JP Morgan Chase's pay packages for its executives in 2015?

<p>61% (C)</p> Signup and view all the answers

Which organization encouraged companies in carbon-intensive sectors to report their greenhouse gas emissions to the CDP?

<p>Church Investors Group (B)</p> Signup and view all the answers

What was the improvement in the environmental performance of the 53 companies targeted by the Church Investors Group?

<p>72% (C)</p> Signup and view all the answers

Which company has a higher ESG score compared to the industry average?

<p>Linde (C)</p> Signup and view all the answers

Which company integrates sustainability as a basic consideration in the design of its processes and products?

<p>ASICS (A)</p> Signup and view all the answers

Which company pays particular attention to the environmental impact of its production processes?

<p>Linde (D)</p> Signup and view all the answers

Which action is part of active ownership?

<p>Both A and B (C)</p> Signup and view all the answers

Which factor caused a reduction in Anglo American's target price by -7%?

<p>Wage inflation and labor strikes (B)</p> Signup and view all the answers

What impact did integrating ESG risk analysis have on the Robeco analysts' estimate of Anglo American's target price?

<p>Reduced it by 19% (D)</p> Signup and view all the answers

What is one reason why some analysts have taken a favorable view of Anglo American's ESG performance?

<p>Risk mitigation processes (C)</p> Signup and view all the answers

Which of the following is a characteristic of impact investing?

<p>Investments are expected to generate a social and/or environmental impact (D)</p> Signup and view all the answers

What is the investment objective of the Water- and Air-Themed Fund?

<p>To invest in equities issued by companies focused on the water-related sector worldwide (C)</p> Signup and view all the answers

What is the main focus of the Alternative Energy–Themed Fund?

<p>Investing in companies involved in the alternative energy or energy technology sectors (D)</p> Signup and view all the answers

What types of instruments can the Food- and Agriculture-Themed Fund invest in?

<p>A broad range of instruments including transferable securities, units in collective investment schemes, exchange-traded funds, and exchange-traded commodities (C)</p> Signup and view all the answers

What is the investment strategy of the firm?

<p>To focus on opportunities where investments can generate investor returns through helping meet social or environmental challenges (C)</p> Signup and view all the answers

What is the concept pioneered by The Gym?

<p>Low-cost gyms (A)</p> Signup and view all the answers

What percentage of The Hoxton staff live in underserved areas?

<p>More than 70% (B)</p> Signup and view all the answers

What is SimplySwitch?

<p>An independent and free online and telephone-based price comparison and switching service (B)</p> Signup and view all the answers

Which of the following is NOT considered a violation of international norms for exclusion from the ACWI Select Global Norms and Criteria Index?

<p>Support for controversial regimes (C)</p> Signup and view all the answers

Which of the following activities would lead to exclusion from the ACWI Select Global Norms and Criteria Index?

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

What is the approach to best-in-class selection used by NN Investment Partners?

<p>Preference for companies with better ESG performance levels and improving ESG performance levels (A)</p> Signup and view all the answers

Why does NN Investment Partners believe that the best-in-class method can improve the risk and/or return characteristics of a portfolio?

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

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