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Free ESG-Investing Exam Braindumps (page: 43)

Page 42 of 118
PDF with 468 Questions

Asset owners can reflect ESG considerations through corporate engagement by:

  1. discussing ESG issues with an investee company's board.
  2. working with regulators to design a more stable financial system.
  3. using ESG criteria to identify investment opportunities through a thematic approach.

Answer(s): A

Explanation:

Asset owners can reflect ESG considerations through corporate engagement by discussing ESG issues with an investee company's board. This direct engagement allows asset owners to influence corporate behavior, encourage better ESG practices, and address specific ESG concerns that may impact long-term value creation. This approach is integral to active ownership and stewardship strategies.



Institutional investors achieve their stewardship and engagement objectives in practice through which of the following?

  1. Engaging directly with companies only
  2. Utilizing proxy voting advisory firms only
  3. Both engaging directly with companies and utilizing proxy voting advisory firms

Answer(s): C

Explanation:

Institutional investors achieve their stewardship and engagement objectives by both engaging directly with companies and utilizing proxy voting advisory firms. Direct engagement involves ongoing dialogue with company management and boards to influence corporate practices. Proxy voting advisory firms provide recommendations on voting matters at shareholder meetings, helping investors make informed decisions that align with their ESG priorities.



Which of the following ESG investment approaches is most likely applicable when investing in sovereign debt?

  1. ESG tilting
  2. Collaborative engagement
  3. Active private engagement

Answer(s): A

Explanation:

ESG tilting is an investment approach applicable when investing in sovereign debt. It involves adjusting the weightings of sovereign bonds in a portfolio based on ESG scores, thereby favoring countries with better ESG performance. This method aligns investment decisions with ESG criteria while maintaining diversification and managing risk within sovereign bond portfolios.



Stock exchanges can contribute to the growth of ESG market by:

  1. supporting companies to issue more ESG-oriented bonds.
  2. increasing the disclosure requirements on ESG data by listed companies.
  3. considering ESG factors when voting on behalf of shareholders at companies' annual general meetings.

Answer(s): B

Explanation:

Stock exchanges can contribute to the growth of the ESG market by increasing the disclosure requirements on ESG data by listed companies. Enhanced disclosure requirements ensure that investors have access to comprehensive and comparable ESG information, which is critical for making informed investment decisions. This promotes transparency and encourages companies to improve their ESG practices.

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