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Sustainable Investing Certificate(CFA-SIC) Questions 336–340 (page: 69)

Updated On: 10-Feb-2026

The mechanism of dual-class shares most likely favors:

  1. Institutional investors
  2. Minority shareholders
  3. The founders of a company

Answer(s): C

Explanation:

Dual-class shares typically favor the founders of a company by giving them greater voting power compared to other shareholders, allowing them to retain control over decision-making even if their economic ownership of the company is diluted. This mechanism is often used to protect the founders' vision and strategy for the company.ESG


Reference:

Chapter 5, Page 241 - Governance Factors in the ESG textbook.



Creating long-term stakeholder value by implementing a strategy that focuses on the ethical, social, environmental, cultural and economic dimensions of doing business is best described as:

  1. corporate sustainability.
  2. triple bottom line accounting.
  3. corporate social responsibility.

Answer(s): C

Explanation:

Corporate social responsibility (CSR) refers to the practice of businesses engaging in initiatives that benefit society. The term emphasizes the company's commitment to conduct business in an ethical manner by considering social, environmental, and economic factors. CSR goes beyond compliance, encouraging companies to engage in activities that can positively impact their stakeholders.
(ESGTextBook[PallasCatFin], Chapter 1, Page 6)



Supply chain sustainability management:

  1. considers practices within the main production factory only.
  2. looks at the broader production life cycle, including sourcing.
  3. is simple to understand given supply chains are distinct and independent.

Answer(s): B

Explanation:

Supply chain sustainability management encompasses the entire lifecycle of production, including sourcing, manufacturing, and end-use. It evaluates environmental, social, and governance (ESG) factors across all stages. This includes how raw materials are sourced, the environmental footprint of production, and labor conditions in the supply chain. (ESGTextBook[PallasCatFin], Chapter 3, Page 114)



In comparison to institutional investors, the pace of adoption of ESG by retail investors has been:

  1. slower.
  2. the same.
  3. faster.

Answer(s): A

Explanation:

Retail investors have historically been slower in adopting ESG principles compared to institutional investors. This can be attributed to lower awareness and the complexity of ESG information. Institutional investors are often more engaged due to client demand and regulatory pressures.
(ESGTextBook[PallasCatFin], Chapter 2, Page 58)



A globally aging population has resulted in the ratio between the active and inactive parts of the workforce to:

  1. decrease.
  2. remain about the same.
  3. increase.

Answer(s): A

Explanation:

As the global population ages, the proportion of the workforce that is active has decreased, with more people retiring. This has significant implications for economic growth, pensions, and healthcare systems. (ESGTextBook[PallasCatFin], Chapter 4, Page 190)



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