2025 Valid Sustainable-Investing Exam Updates – 2025 Study Guide [Q342-Q364]

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2025 Valid Sustainable-Investing Exam Updates – 2025 Study Guide

Sustainable-Investing Certification – The Ultimate Guide [Updated 2025]

QUESTION 342
Which of the following board committees aims to ensure that the board is balanced and effective?

Audit committee

Compensation committee

Corporate governance committee

QUESTION 343
Using the “shades of green” methodology developed by the Center for International Climate Research (CICERO), a project that does not explicitly contribute to the transition to a low carbon and climate resilient future is given the shading of:

red

yellow

light green

QUESTION 344
The debate around regulating the social media industry is based on risks associated with:

big data

digital disruption

embedded systems

QUESTION 345
All else equal, which of the following companies would most likely have a lower price-to-earnings (P/E) ratio than industry average?

A company with lower employee turnover than industry average

A company with higher climate-related risk than industry average

A company with higher scores on independent surveys of employee satisfaction and engagement than industry average

QUESTION 346
An emissions trading system (ETS) permits a high allocation of free allowances to energy-intensive companies. The most likely objective of this practice is to:

maintain a low unit price for emissions.

prevent the offshoring of emissions into other jurisdictions.

increase the quantity of emissions allocated to the participants in the ETS.

QUESTION 347
Which of the following statements is least accurate? Compared to social and environmental factors, governance has a:

greater link to financial performance.

greater consideration in traditional investment analysis.

greater materiality for private companies than for public companies.

QUESTION 348
In an emissions trading system:

Emissions caps are fixed over time

Permits may be allocated free of charge

Price signals cannot be created from the trading of permits

QUESTION 349
The “Protect, Respect, and Remedy” framework is the foundation for the:

Corporate Human Rights Benchmark (CHRB).

OECD Guidelines for Multinational Enterprises (MNEs).

United Nations Guiding Principles on Business and Human Rights (UNGPs).

QUESTION 350
Which of the following corporate governance structures is most common around the world?

Joint auditors

Single-tier boards

Cumulative voting

QUESTION 351
Which of the following ESG investment approaches would most appropriately be used to construct a balanced and diversified portfolio?

Thematic investing

Screening on a relative basis

Screening on an absolute basis

QUESTION 352
According to the UK Investor Forum which of the following is a key success factor for effective engagement?

Transparency on conflicts of interest

Regulatory approval of the collaboration

Clear leadership with appropriate relationships, skills and knowledge

QUESTION 353
Which of the following is most likely an example of quantitative ESG analysis?

Issuer-reported carbon emissions

Executive compensation policies linked to progress on ESG-related goals

The presence and credibility of investments, policies, and commitments to ESG-related goals

QUESTION 354
Which of the following statements about ESG integration in fixed income is most accurate?

Municipal bonds cannot be used for ESG integration.

Credit rating agencies attempt to capture the risk of contingent liabilities in their sovereign credit ratings.

Equity investors typically place greater emphasis on ESG factors that affect balance sheet strength compared to fixed-income investors.

QUESTION 355
Investment in fossil fuels is permitted under:

The EU Paris-Aligned Benchmarks only

The EU Climate Transition Benchmarks only

Both the EU Paris-Aligned Benchmarks and the EU Climate Transition Benchmarks

QUESTION 356
According to the consulting firm McKinsey & Company, which of the following is a dimension of sustainable investing applied by fund managers?

Public reporting

Security valuation

Strategic asset allocation

QUESTION 357
According to the “Shades of Green” methodology developed by the Center for International Climate Research (CICERO), which of the following colors best categorizes a green bond that reduces emissions in the near term without contributing to climate-resilient long-term solutions?

Yellow

Light Green

Medium Green

QUESTION 358
Which of the following is a success factor characteristic of investor collaboration? Investors should have:

an engagement approach that is bespoke to the target company.

clear leadership with appropriate relationships, skills, and knowledge.

objectives that are linked to material strategic and governance issues.

QUESTION 359
Which of the following most likely indicates strong corporate governance? A company board with:

gender diversity.

a chair who also serves as the company’s CEO.

directors that have similar professional backgrounds.

QUESTION 360
The United Nations Framework Convention on Climate Change (UNFCCC) aims to:

operationalize the Paris Agreement for the business world

promote material climate change disclosures in mainstream reporting

stabilize greenhouse gas (GHG) emissions to limit man-made climate change

QUESTION 361
A challenge to ESG integration for investment managers is the:

Narrow range of possible ESG data.

Inherently subjective nature of ESG analysis.

High correlation among third-party ESG ratings.

QUESTION 362
In France, shareholders eligible for being awarded double voting rights are

founding shareholders during an IPO

long-standing shareholders of at least two years.

minority shareholders that are employee representatives

QUESTION 363
Compared to an optimal portfolio that does not have any ESG restrictions a portfolio that optimizes for multiple ESG factors will most likely experience

lower active risk

higher active risk.

lower tracking error

QUESTION 364
The quality of a company’s ESG disclosures is most likely affected by:

Its size only

Its location only

Both its size and its location