🎓CFA Final Prep All Topics

ESG Factors and ESG Investing Approaches

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Question

A company faces higher emissions costs and flood risk to factories. Which ESG dimension is most directly implicated?

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Answer

Environmental factors.

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Question

A strategy focused on clean energy and water scarcity solutions uses which ESG approach?

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Answer

Thematic investing.

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Question

If new environmental legislation threatens profits, why is that an ESG concern?

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Answer

It increases regulatory exposure and business risk.

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Question

A drought threatens a company's production sites. Which environmental ESG concept is being tested?

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Answer

Physical climate risk vulnerability.

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