QUESTION: 5

A global cosmetics company surveys consumers. The survey reveals close to 75% of consumers indicate sustainability is an important issue and are willing to change shopping habits to reduce environmental impact. The company responds by establishing a sustainability framework. As part of the process to implement this framework, a company sustainability analyst identifies sustainable investment and disclosure practices.
Which recommendation will the analyst likely make to implement a company sustainability framework?

Follow NGFS sustainability best practices and verify company products and activities are considered sustainable through NGFS recommended voluntary disclosures.
Use the EU Taxonomy for classifying products as “green” when doing business in the EU market but develop new classification systems for jurisdictions outside the EU.
Conduct internal audits annually and disclose any greenwashed product findings to government green finance taskforces.
Incorporate mandatory disclosures and marketing requirements to ensure claims about sustainable products are fair and not misleading.

Answer(s): D

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QUESTION: 6

To improve sustainability, a railroad and transportation services company will revitalize its rail network by installing an operating system that reduces idle time. A reduction in idle time will decrease GHG emissions. To finance this plan, the company will issue green bonds beginning in 2024. The company sustainability director develops sustainability objectives and eligibility criteria to communicate to investors.
The director is fulfilling which core component of the Green Bond Principles?

Process for project evaluation and selection
Reporting
Management of proceeds
Use of proceeds

Answer(s): A

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QUESTION: 7

A large insurance company in South America expands use of climate scenario analysis. The company used RCPs in previous scenario analyses but now hires an actuary with climate expertise to incorporate SSPs in this process.
How can the actuary advise the insurance company use SSPs going forward?

Demonstrate how SSP and RCP trajectories typically show contradictory emissions trend trajectories.
Combine SSPs with different RCPs to assess climate policy options.
Eventually replace SSPs with RCPs by integrating underlying data assumptions.
Use SSPs to provide alternative emissions pathways to RCPs.

Answer(s): D

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QUESTION: 8

A climate risk consultant advises an Eastern European central bank. In response to regulatory changes, the bank will incorporate climate-related risks into bank policies. The consultant writes a summary on how central banks incorporated climate-related risks into policies. The summary highlights the Bank of England (BoE) example to demonstrate how the BoE integrated climate-related risks within the bank supervisory scope.
Which of the following BoE practices will the consultant recommend?

Integrate climate-related risks into bank monetary policy before attempting to integrate climate into other areas of bank operations.
Obligate firms to allocate responsibility for climate-related risks using a bottom-up approach where the risk team assesses climate risks while the board of directors approves or denies.
Require banks and insurers include all material exposures relating to financial risks from climate change under capital adequacy and solvency assessments.
Adopt a policy that requires firms to submit climate risk disclosures that precisely follow NGFS guidelines.

Answer(s): C

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