Sustainable and Ethical Trading Practices
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Questions and Answers

What does sustainable and ethical trading involve?

  • Focusing only on short-term financial returns
  • Considering the environmental, social, and governance (ESG) impacts alongside financial returns (correct)
  • Ignoring company fundamentals
  • Trading without regard for market conditions

Which of the following is an example of evaluating the environmental impact in ESG criteria?

  • Assessing a company's labor practices
  • Examining executive pay structures
  • Analyzing a company's carbon footprint and resource use (correct)
  • Reviewing shareholder rights

What is the core principle of transparency and accountability in sustainable trading?

  • Keeping trading activities confidential
  • Open communication about trading activities and taking responsibility for their impacts (correct)
  • Prioritizing short-term gains
  • Ignoring ESG factors

What does a long-term focus in sustainable trading practices involve?

<p>Investing in companies with sustainable business practices for long-term value creation (C)</p> Signup and view all the answers

How can prop trading firms integrate ESG factors into their investment analysis?

<p>By using ESG screening tools to evaluate potential investments based on ESG performance (B)</p> Signup and view all the answers

What is active ownership and engagement in the context of sustainable trading?

<p>Engaging with companies to improve their ESG practices (B)</p> Signup and view all the answers

Which of the following is an example of avoiding harmful activities in ethical trading?

<p>Excluding companies involved in environmental degradation or human rights abuses (C)</p> Signup and view all the answers

How can prop trading firms demonstrate their commitment to sustainable practices?

<p>By regularly monitoring and reporting on the ESG performance of investments (B)</p> Signup and view all the answers

What is one of the benefits of sustainable and ethical prop trading?

<p>Enhanced risk management by considering ESG factors (C)</p> Signup and view all the answers

How does focusing on sustainable sectors benefit prop trading firms?

<p>By aligning trading strategies with ethical and sustainable principles (B)</p> Signup and view all the answers

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