Question 1

A challenge to ESG integration for investment managers is the:

Options :

A : Narrow range of possible ESG data.

B : Inherently subjective nature of ESG analysis.

C : High correlation among third-party ESG ratings.

Answer: B

Question 2

Which of the following challenges is most likely related to the attribution of returns to ESG factors?

Options :

A : Difficulty to demonstrate the value added by a programme of engagement

B : Difficulty to assess the performance drag that comes from excluding an industrial sector

C : Performance attribution to ESG factors is still in its early stages and may well need further assurance and consistency for it to have real power

Answer: C

Question 3

Which of the following are most likely to raise the risks of greenwashing by private equity investors? Investors that integrate ESG factors for the purposes of:

Options :

A : Value creation

B : Risk management

C : Attracting ESG-conscious capital allocators

Answer: C

Question 4

With regards to environmental analysis in fixed income investing, a country-level analysis is relevant to:

Options :

A : Corporate bonds only

B : Government bonds only

C : Both corporate bonds and government bonds

Answer: C

Question 5

The Jevons paradox refers to:

Options :

A : Standard cost-benefit analysis being inadequate to quantify the downside losses from climate change

B : Relative improvement in natural resource efficiency being offset by increasing natural resource consumption

C : Reduction in snow and ice cover being responsible for lowering the amount of sunlight that is reflected back into space

Answer: B