Free Sustainable-Investing Exam Braindumps
Sustainable Investing Certificate(CFA-SIC) Questions 291–295 (page: 60)

Updated On: 10-Feb-2026

From a company investment perspective, which of the following is the most significant social impact from climate change transition risks?

  1. Stakeholder opposition
  2. A lack of skilled workers
  3. The need to restructure the business

Answer(s): C

Explanation:

The need to restructure a business is a significant social impact from climate change transition risks. As companies shift towards more sustainable models, they may need to make large-scale changes in operations, workforce, and supply chains, which can have profound social implications.ESG


Reference:

Chapter 4, Page 209 - Social Factors in the ESG textbook.



In Japan, additional statutory auditors are individually appointed by the:

  1. Shareholders
  2. Risk committee
  3. Regulatory body

Answer(s): A

Explanation:

In Japan, shareholders appoint additional statutory auditors. This ensures that the auditors are independent from management and aligned with shareholder interests, which is crucial for maintaining effective corporate governance and transparency.ESG


Reference:

Chapter 5, Page 231 - Governance Factors in the ESG textbook.



Which of the following best characterizes a climate mitigation strategy rather than a climate adaptation strategy?

  1. Developing drought-resilient crops
  2. Implementing carbon reduction policies
  3. Planning more efficiently for scarce water resources

Answer(s): B

Explanation:

Climate mitigation strategies focus on reducing the causes of climate change, such as implementing carbon reduction policies to lower greenhouse gas emissions. In contrast, adaptation strategies involve adjusting to the effects of climate change, like developing drought-resistant crops.ESG


Reference:

Chapter 3, Page 114 - Environmental Factors in the ESG textbook.



Which of the following is most likely a result of monitoring rather than engagement?

  1. Changed company behaviors
  2. Efficient capital allocation by investors
  3. Delivery of corporate purpose and culture

Answer(s): B

Explanation:

Monitoring allows investors to gather information on company performance and capital allocation.
While engagement may lead to changes in company behavior or improvements in corporate governance, monitoring focuses on analyzing and optimizing capital efficiency.ESG


Reference:

Chapter 6, Page 297 - Engagement and Stewardship in the ESG textbook.



ESG integration is most likely enforced by regulating:

  1. Stewardship
  2. Asset owners
  3. Corporate disclosure

Answer(s): C

Explanation:

Corporate disclosure is a primary focus of ESG regulation. Requiring companies to disclose their ESG practices ensures transparency and allows investors to make informed decisions. Regulations around stewardship and asset owners often complement these disclosure requirements but are not the main enforcement mechanism for ESG integration.ESG


Reference:

Chapter 7, Page 364 - ESG Analysis, Valuation & Integration in the ESG textbook.



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