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GARP SCR Exam
Sustainability and Climate Risk (Page 4 )

Updated On: 30-Jan-2026
Page 3 of 17
PDF with 137 Questions

A bank assesses lending portfolio alignment with various climate change scenarios. To assist in this process, the risk team applies the Paris Agreement Capital Transition Assessment (PACTA) tool to examine transition risk for power generation, automotive, and steel sectors. The team examines different PACTA metrics for each sector based on data availability and sectoral profile.
For sectors with no clear zero-carbon pathway, what metric will PACTA employ?

  1. Production volume trajectory
  2. Carbon allocation credit
  3. Emission intensity
  4. Technology and fuel mix

Answer(s): C



A climate resilience consultant prepares an overview for a regional agency client. The overview summarizes climate policies that significantly reduce emissions. The client expresses a strong preference for a policy that limits emissions and offers flexibility in participant permits.
What policy should the consultant recommend to the client?

  1. Feed-in tariffs
  2. Fuel efficiency standards
  3. Carbon tax
  4. Cap-and-trade scheme

Answer(s): D



Senior management of a sportswear manufacturer will issue a bond to optimize company capital structure, while providing investors with an opportunity to contribute to positive transformation of the fashion industry. Management prefers a bond with a high rate of issuance, and the company sustainability team researches various green and sustainable finance instruments and issuance information over the past 5 years. The team recommends a bond that globally posted the highest growth in issuance between 2019 and 2020.
Which bond did the team recommend?

  1. Climate bond
  2. Green bond
  3. Sustainability bond
  4. Social bond

Answer(s): B



A technology company expands its sustainable offerings and develops a flight booking application that allows customers to offset a flight’s carbon emissions. An analyst at the company researches climate agreements to inform the structure of the offsetting program.
How does the analyst describe the achievements and shortcomings of the agreements?

  1. A shortcoming of COP21 (Paris) is that countries are legally obligated to annually submit nationally determined contributions (NDCs), and most have kept NDCs at unchanged levels.
  2. COP3 (Kyoto) resulted in differentiated national responsibilities wherein developing countries were not subject to emissions reduction obligations, which disincentivized Annex 1 countries to take action.
  3. The main achievement of COP15 (Copenhagen) was the creation of the IPCC, an influential scientific body that became the leading body in guiding subsequent climate agreements.
  4. Although COP1 (Berlin) ended with no binding treaty, it was the first COP to establish a goal that global warming remains below 2°C.

Answer(s): A



An international report on SDG progress identifies a large south Asian nation as not on track to meet most SDGs. Specifically, the nation’s reduction of infant mortality and adoption of clean energy lag behind regional peers. In response, a government environmental minister creates a memorandum outlining steps the nation can take to advance the 2030 Agenda goals. The office distributes the memorandum to other government agencies.
How will the memorandum describe the 2030 Agenda goals?

  1. Governments must update their progress on the goals every five years.
  2. Progress on any goal is dependent on the advancement of the previous goal.
  3. A project intended to advance a specific goal can help advance another goal.
  4. Each goal sets a quantitative threshold to demonstrate progress.

Answer(s): D



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