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Sustainable Investing Certificate(CFA-SIC) Questions 276–280 (page: 57)

Updated On: 10-Feb-2026

A bond that funds offshore wind projects is most likely a:

  1. Blue bond
  2. Green bond
  3. Transition bond

Answer(s): B

Explanation:

Offshore wind projects are considered clean energy projects and typically qualify as "Green bonds." Green bonds are specifically issued to finance environmentally sustainable projects, particularly those related to renewable energy.ESG


Reference:

Chapter 7, Page 153 - ESG Analysis, Valuation &

Integration in the ESG textbook.



Engagement is best described as a dialogue:

  1. To inform incremental buy/hold/sell decisions
  2. With a specific and targeted objective to achieve change
  3. To understand a company's stakeholders and its performance

Answer(s): B

Explanation:

Engagement is a dialogue with a specific and targeted objective to achieve change. This form of active ownership allows investors to influence companies' practices, particularly regarding their ESG risks and opportunities. The goal is to improve long-term shareholder value and drive positive change within the company.ESG


Reference:

Chapter 6, Page 274 - Engagement and Stewardship in the ESG textbook.



Scopewashing is best described as a situation in which a company's management:

  1. Uses hyperbole to highlight its sustainability-related skills and experience
  2. Emphasizes positive action in one ESG area while negatively contributing to another
  3. Keeps quiet about their environmental goals for fear of retribution or misinterpretation

Answer(s): B

Explanation:

Scopewashing occurs when a company highlights its positive actions in one ESG area, while downplaying or hiding its negative contributions in other areas. This misleading practice can create a false image of a company's overall sustainability performance.ESG


Reference:

Chapter 7, Page 365 - ESG Analysis, Valuation & Integration in the ESG textbook.



Which of the following statements about the effects of globalization are most likely correct?

Statement 1: Globalization has led to increased efficiency in markets, resulting in wider availability of products at lower costs.

Statement 2: Globalization has led to increased social well-being due to a reduction in social structural inequality.

  1. Statement 1 only
  2. Statement 2 only
  3. Both Statement 1 and Statement 2

Answer(s): A

Explanation:

Globalization has significantly improved market efficiency and lowered product costs by expanding production and distribution networks. However, while globalization has created wealth, it has not consistently reduced social structural inequality, and in some cases, it has exacerbated these divides.ESG


Reference:

Chapter 4, Page 190 - Social Factors in the ESG textbook.



Material ESG risks that could be managed by a company but which are not yet managed best describe:

  1. Manageable risks
  2. Unmanageable risks
  3. The management gap

Answer(s): C

Explanation:

The management gap refers to material ESG risks that a company has the ability to manage but has not yet addressed. This gap can pose a significant threat to long-term sustainability andfinancial performance if left unresolved.ESG


Reference:

Chapter 7, Page 326 - ESG Analysis, Valuation & Integration in the ESG textbook.



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