QUESTION: 85

Assessing the alignment of local labor laws with International Labour Organization (ILO) principles is an example of social analysis at the:

sector level
country level.
company level

Answer(s): B

Explanation:

Assessing the alignment of local labor laws with International Labour Organization (ILO) principles is an example of social analysis at the country level. This type of analysis involves evaluating the legal and regulatory frameworks of a specific country to determine how well they adhere to international labor standards.

National Legislation: Social analysis at the country level examines the extent to which a country's labor laws comply with ILO principles, such as freedom of association, the right to collective bargaining, and the elimination of forced labor, child labor, and discrimination in employment.

Regulatory Environment: Understanding the alignment of local labor laws with ILO standards helps assess the regulatory environment's effectiveness in protecting workers' rights and promoting fair labor practices.

Implications for Investment: For investors, this analysis provides insights into the social risks and opportunities associated with operating in or investing in a particular country. It helps identify potential compliance issues and social impacts that could affect investment decisions.

Reference:

MSCI ESG Ratings Methodology (2022) - Discusses the importance of evaluating labor laws at the country level to understand social risks and regulatory compliance.

ESG-Ratings-Methodology-Exec-Summary (2022) - Highlights the role of country-level social analysis in assessing adherence to international labor standards and its impact on investment strategies.

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QUESTION: 86

An asset manager considering environmental risks would most likely use:

qualitative analysis only
quantitative analysis only
both qualitative and quantitative analyses

Answer(s): C

Explanation:

An asset manager considering environmental risks would most likely use both qualitative and quantitative analyses. Combining these approaches provides a comprehensive understanding of the environmental risks associated with investments.

Qualitative Analysis: This involves evaluating non-numerical information, such as company policies, management practices, and environmental impact reports. It helps assess the company's approach to managing environmental risks and its commitment to sustainability.

Quantitative Analysis: This involves analyzing numerical data, such as carbon emissions, energy consumption, water usage, and waste generation. It provides measurable metrics that can be compared over time and against industry benchmarks.

Holistic Assessment: Using both qualitative and quantitative analyses allows asset managers to gain a complete picture of a company's environmental performance. It helps identify potential risks and opportunities, leading to more informed investment decisions.

Reference:

MSCI ESG Ratings Methodology (2022) - Highlights the importance of integrating both qualitative and quantitative analyses in evaluating environmental risks.

ESG-Ratings-Methodology-Exec-Summary (2022) - Discusses the benefits of a holistic approach to environmental risk assessment using diverse analytical methods.

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QUESTION: 87

Jurisdictions are most likely to impose extraterritorial laws in relation to:

bribery and corruption
paying suppliers appropriately and promptly.
upholding high standards in health and safety

Answer(s): A

Explanation:

Jurisdictions are most likely to impose extraterritorial laws in relation to bribery and corruption. Extraterritorial laws are those that have legal force beyond the borders of the issuing country, and they are often applied to combat global issues such as corruption.

Global Standards: Countries impose extraterritorial laws to ensure that their nationals and corporations comply with anti-bribery and anti-corruption standards, regardless of where they operate. This helps maintain ethical business practices internationally.

Regulatory Frameworks: Prominent examples of extraterritorial laws include the U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act, which apply to activities conducted abroad by U.S. and UK entities, respectively. These laws aim to prevent and penalize bribery and corruption on a global scale.

Enforcement and Compliance: By implementing extraterritorial anti-corruption laws, jurisdictions can enforce compliance and hold companies accountable for corrupt practices in foreign countries, promoting transparency and integrity in international business.

Reference:

MSCI ESG Ratings Methodology (2022) - Discusses the role of extraterritorial laws in combating bribery and corruption and their impact on global business practices.

ESG-Ratings-Methodology-Exec-Summary (2022) - Highlights the significance of extraterritorial regulations in maintaining ethical standards and preventing corruption in international operations.

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QUESTION: 88

Working conditions on a tree plantation are most likely an example of a(n)

social issue
governance issue.
environmental issue

Answer(s): A

Explanation:

Working conditions on a tree plantation are most likely an example of a social issue. This encompasses aspects related to labor practices, employee welfare, and human rights.

Labor Practices: Evaluating working conditions involves assessing factors such as wages, working hours, health and safety standards, and the provision of benefits. Ensuring fair and safe working conditions is a critical social concern.

Employee Welfare: Social analysis of working conditions includes examining the treatment of workers, their access to healthcare, training opportunities, and overall well-being. Poor working conditions can lead to labor unrest and reputational damage.

Human Rights: Ensuring that working conditions respect human rights is essential. This includes preventing forced labor, child labor, and discrimination. Companies must adhere to international labor standards to uphold workers' rights and promote social justice.

Reference:

MSCI ESG Ratings Methodology (2022) - Highlights the importance of assessing social issues, such as working conditions, in evaluating a company's ESG performance.

ESG-Ratings-Methodology-Exec-Summary (2022) - Discusses the impact of labor practices and employee welfare on the social dimension of ESG analysis.

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QUESTION: 85

Explanation:

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QUESTION: 86

Explanation:

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QUESTION: 87

Explanation:

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QUESTION: 88

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