Sustainable Investing Certificate (CFA-SIC) Exam
Last Update Nov 30, 2025
Total Questions : 802
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When portfolio managers upload their portfolios onto third-party ESG data provider online platforms, most of these platforms are capable of:
Which of the following is one of the six environmental factors in the “Materiality Map" by Sustainability Accounting Standards Board (SASB)?
Which of the following is most likely a characteristic of good corporate governance?
Analyzing a portfolio's social impact exposure is best achieved by first understanding material social topics at:
A discount retailer facing a consumer boycott due to its poor working conditions will most likely face:
Which of the following investor types most likely prefers exclusions as an ESG approach?
With regard to screening, exclusions that are not supported by global consensus are best described as:
With respect to the current state of ESG disclosure globally, issuer reporting frameworks for ESG information are:
Based on the Sustainability Accounting Standards Board's (SASB) materiality map, which of the following is a material ESG risk for healthcare companies?
As a result of an aging population, which of the following sectors is most likely to experience slower growth?
ESG factors impacting balance sheet strength rather than growth opportunities are most material to:
The Integrated Biodiversity Assessment Tool (IBAT) is best described as an interactive mapping tool allowing decision makers to:
With regards to environmental analysis in fixed income investing, a country-level analysis is relevant to:
When incorporating ESG factors into valuation inputs, which of the following would most likely require the lowest discount rate?
To produce a rating, an ESG rating provider will most likely apply a weighting system to
When undertaking an ESG assessment of a private equity deal ESG screening and due diligence will most likely take place during:
A company reduces water usage and increases usage of more expensive resources after regulations become more stringent. This most likely impacts:
Which of the following challenges is most likely related to the attribution of returns to ESG factors?
Which of the three ESG factors is most often taken into consideration by traditional investment analysts?
Which of the following statements about the Green Claims Directive (GCD) is most accurate? The GCD:
Which of the following statements about quantitative ESG analysis is most accurate?
What order should investors follow when implementing social factors in their investment decisions?
Process 1: Assess the critical social factors in the supply chain
Process 2: Assess how exposed companies are to sector-specific social factors
Process 3: Assess which social factors are most financially material in a particular industry
Which of the following was established by the United Nations Environment Programme Finance Initiative (UNEP FI)?
Which of the following investor types most likely has the shortest investment time horizon?
Which of the following sectors has the highest percentage of corporate profits at risk from state intervention?
Excluding investment in companies with a history of labor infractions is best categorized as a(n):
To fall in scope of mandatory compliance with the EU’s Corporate Sustainability Reporting Directive (CSRD), companies would need to meet which of the following conditions?
Condition 1EUR40 million in net turnover
Condition 2EUR20 million in assets
Condition 3250 or more employees
Which of the following technologies is most likely to be viewed by investors as a strategic solution to the decarbonization of high-temperature processes?
According to the Taskforce on Nature-related Financial Disclosures (TNFD), the four realms of nature include
Which of the following would most likely be the initial step when drafting a client's investment mandate?
A bond issued to fund projects that provide a clear benefit to the environment best describes a:
With respect to ESG integration, adjusting financial model inputs based on an evaluation of a company’s ESG risk factors is an example of a:
According to the Sustainability Accounting Standards Board (SASB) materiality risk mapping, greenhouse gas emissions (GHG) are most material for the
Assessing the alignment of local labor laws with International Labour Organization (ILO) principles is an example of social analysis at the:
In ESG integration, which of the following best describes a data-mformed analytical opinion designed to support investment decision-making?
When integrating governance factors into decision-making, a fund manager with a simple level of confidence in the valuation range is most likely using:
Which of the following requires two audit firms to look at financial statements, rather than the usual one?
Which of the following best protects minority shareholders when a company raises additional capital?
According to the Principles for Responsible Investment, which of the following is not an ESG engagement dynamic creating value for investors and companies?
Which of the following statements is most accurate? For ESG credit scoring, credit rating agencies test how ESG factors affect an issuer's:
A retailer facing a consumer boycott due to its poor working conditions will most likely face:
A material ESG risk that cannot be addressed by company initiatives is best described as:
When using mean-variance optimization (MVO) models, ESG-related issues most likely:
A private debt fund manager is most likely to engage with borrowers on material ESG risks through:
Mass migration from developing countries to developed countries is most likely caused by:
Organizing companies according to their sustainability attributes, such as resource intensity, sustainability risks, and innovation opportunities, best describes the:
Which of the following ESG risks is not well suited for inclusion in the discount rate?
Which of the following statements about scorecards used to assess ESG factors is most accurate?
Stewardship codes initially focused on which of the following asset classes?
Which of the following statements regarding natural resources is most accurate?
Which of the following would most likely see its estimate of intrinsic value increased by analysts?
Which of the following economists used the dismal theorem to argue that a standard cost–benefit analysis is inadequate to deal with the potential downside losses from climate change?
Which of the following statements regarding availability of ESG data is most accurate? According to the Principles of Responsible Investment:
Which of the following social factors are most likely to impact external stakeholders?
A company has an audit contract with one Big Four firm and non-audit contracts with two other Big Four firms. Which scenario is most likely to materialize when the company rotates its auditors?
A potential challenge for an asset owner implementing responsible investment is:
Which of the following is a principle of the Net Zero Asset Managers Initiative?
Which of the following data are most likely the easiest to optimize in a portfolio?
Which of the following is one of the main principles of stewardship codes?
An analyst evaluates the following statements about investor engagement:
Statement 1:Investor engagement focuses on preserving and enhancing short-term value on behalf of an asset owner.
Statement 2:Investor engagement can encompass lobbying as part of industry groups.
Which of the statements is accurate?
When using mean-variance optimization (MVO) models, ESG-related issues most likely:
Which of the following best describes an Earth system that will exhibit large-scale and long-term changes when reaching critical levels of global warming?
The Global Real Estate Sustainability Benchmark (GRESB) full benchmark report provides a GRESB score. The GRESB score includes and weights which of the following considerations?
Management, policy, and disclosure
Overall portfolio key performance indicator (KPI) performance
According to the Principles of Responsible Investment (PRI), which of the following is an example of a social issue?
Which of the following statements is most accurate? The Kyoto Protocol was created to:
ESG indices that exclude economically meaningful sectors will most likely:
In the context of effective corporate governance, the use of alternative performance metrics (APMs) most directly raises questions about:
According to an OECD Centre for Opportunity and Equality (COPE) 2015 report, the average income of the richest 10% of the population is about:
Which of the following is a global agreement to phase out the manufacture of hydrofluorocarbons (HFCs)?
For sovereign debt, the predominant approach to ESG investing is most likely:
According to the Taskforce on Nature-Related Financial Disclosures (TNFD), which of the following drivers of nature change can directly translate into a positive impact on circular economy principles?
Firms using an engagement style focusing first on individual companies, starting with the chair, and working through the board and down to management most likely have a(n):
Negative screening of tobacco-related products is best grouped into which of the following basic categories?
According to the "Shades of Green" methodology developed by the Center for International Climate Research (CICERO), which of the following best categorizes a green bond where accurate assessment of the contribution of the project or solution to a low-carbon, climate-resilient future is not possible with the information available?
A fund focused on investing in the best ESG performers relative to industry peers across a range of different criteria is most likely engaged in:
A meat-processing company does not sell its pork products in predominantly Muslim countries. Investing in the company on this basis would be considered an example of:
Which issue was most similar in the governance challenges faced by Enron and WeWork?
An investor uses relative screening for 20 sustainable funds. In the sequence of steps outlined by the Principles for Responsible Investment (PRI), which step immediately follows publicizing clear screening criteria?
Concerns about the capital structure and financial viability of an investee company are most likely reflected in an active investor's voting decisions in relation to:
Which of the following corporate governance structures is most common around the world?
Which of the following statements regarding the effects of an aging population is most accurate?
In the transition to a low-carbon economy, a coal-powered utility without a mitigation strategy will most likely pose the highest risk to its:
Which of the following statements about ESG integration in credit ratings is most accurate?
A credit investor uses fundamental credit measures and sector-specific ESG indicators to evaluate a beverage company. Water is a key input for the ingredients used in the company's products. For the investor, the company's efforts to ensure a steady supply of water would most likely be considered:
Which of the following frameworks created requirements to disclose the extent to which investment products consider or promote environmental and social factors?
According to market reviews conducted by the Global Sustainable Investment Alliance at the start of 2022, the smallest sustainable investment strategy globally (in terms of assets) is:
Which of the following statements regarding engagement and stewardship is most accurate?
If an index excludes companies that earn revenues from gambling, the index is most likely using:
Which of the following statements about stewardship codes is most accurate? Stewardship codes:
According to an OECD Centre for Opportunity and Equality (COPE) 2015 report, the average income of the richest 10% of the population is about:
Which of the following statements regarding the impact of social issues on potential investment opportunities is most accurate?
Which of the following statements about executive pay in public companies is most accurate?
When considering material ESG factors in real estate, which of the following is classified as an environmental factor?
Over the last several years a company has traded at an average price-to-earnings ratio (P/E) of 12x, compared to a peer group range of 11x to 13x. If the company implements a new risk management framework to better manage material ESG risks relative to its peers, it would most likely justify a P/E ratio of:
Which of the following private equity investors is most susceptible to allegations of greenwashing? An investor that views ESG integration as a way of:
In the revised 2020 version of the UK Stewardship Code, a significant change is that signatories are now required to:
Bonds that fund projects that provide access to essential services, infrastructure, and social programs to underserved people and communities are best described as:
Engagement is least appropriate for which of the following investment types?
If a company faces significant environmental regulations, investors would most likely decrease the company’s:
A common characteristic of the EU Paris-Aligned Benchmarks and the EU Climate Transition Benchmarks is that they both:
According to Greenhouse Gas (GHG) Protocol Standards, the emissions associated with suppliers and consumers are classified as:
The UK's Green Finance Strategy identifies the policy lever of greening finance as:
A portfolio manager of an ESG fund attempting to outperform the general market is most likely to:
Which of the following is an example of the internalization of negative externalities?
The International Corporate Governance Network's (ICGN) Model Mandate Initiative requests two areas of ESG-specific disclosure. Which of the following is not one of the disclosures?
A globally aging population has resulted in the ratio between the active and inactive parts of the workforce to:
According to the consulting firm McKinsey & Company, which of the following is a dimension of sustainable investing applied by fund managers?
Alignment of an investment manager’s performance against a long-term ESG investor’s objectives is best achieved by which of the following?
A mature company has launched a product that reduces customers' electricity usage. This should be incorporated into the company’s discounted cash flow (DCF) analysis by increasing its:
Which of the following is best described as a form of engagement that requires institutions to have a formal agreement with concrete objectives and agreed steps?
According to market reviews conducted by the Global Sustainable Investment Alliance at the start of 2020, sustainable investing assets in the five major markets stood at approximately:
Which of the following statements about the materiality of social factors is most accurate?
Which of the following ESG integration techniques is an example of policy engagement? An investor:
Which of the following is an example of indirectly sourced primary ESG data?
Research on ESG integration in strategic asset allocation has tended to focus most on:
Which of the following pension fund actors are most likely exposed to fiduciary legal risks from financial losses caused by climate change?
When using a threshold assessment to integrate governance factors into the investment decision-making process, fund managers most likely focus on the:
Which of the following would credit rating agencies (CRAs) most likely focus on in order to test how well an issuer’s management uses the assets under its control to generate sales and profit?
Natural language processing (NLP) is employed as a tool in ESG investing to:
For engagement strategies to deliver meaningful results in a cost-effective and time-effective manner, investors must:
Which of the following actions is best categorized as an escalation of engagement?
In which of the following circumstances is Free, Prior, and Informed Consent (FPIC) most applicable?
What type of provider of ESG-related products and services is CDP (formerly known as Carbon Disclosure Project)?
Measuring a portfolio's carbon intensity using the European Union's Sustainable Finance Disclosure Regulation (SFDR) accounts for:
Which of the following would most likely be the initial step when drafting a client’s investment mandate?
A materiality assessment to identify ESG issues impacting a company's financial performance is most likely measured in terms of:
When assessing the investment risk of a coal mining company, the concept of double materiality refers to the company reporting on matters of:
Which of the following would most likely see its estimate of intrinsic value increased by analysts?
Which of the following governance initiatives was focused on increased oversight of banks?
In response to policy changes, several of the world’s largest automakers made pledges to halt producing cars with internal combustion engines by 2035. Which of the following would an asset manager most appropriately use to address this trend?
A bond issued to finance construction of a solar farm is an example of a:
Organizing companies according to their sustainability attributes, such as resource intensity, sustainability risks, and innovation opportunities, best describes the:
A company is accused of surveying employees to prevent them from forming a union. The decision of an asset manager to divest from holding shares in the company is an example of:
Corporate engagement and shareholder action is the predominant investment strategy in:
Which of the following approaches best describes a goal of creating long-term stakeholder value by focusing on ethical, social, environmental, cultural, and economic dimensions?
With respect to double materiality reporting, companies often use which of the following when assessing their positive impact on the organization, society and the environment?
A smaller and older workforce in some countries will place a greater onus on productivity for driving growth according to which of the following ESG megatrends?
According to the fundamental conventions of the International Labor Organization (ILO), which of the following should not be supported as a labor right by companies?
Concerns about the capital structure and financial viability of an investee company are most likely reflected in an active investor’s voting decisions in relation to:
Which of the following reporting practices by an investee company is most likely a red flag for an investor?
Which of the following best supports a company’s claim to a commitment to internal social factors?
An institutional asset owner of a listed power company can best assess the quality of a fund manager's engagement by using:
Which of the following represents the majority of the largest asset owners?
A concept that attempts to describe what would happen to global temperatures if CO₂ concentrations in the atmosphere were to double relative to the pre-industrial average is best described as:
Weighted-average carbon intensity and attributed emissions of sovereign debt most likely measure ESG exposures at the:
Which of the following ownership mechanisms best protects minority shareholders?
By 2050, the percentage of the global population that is expected to live in urban environments is:
An ESG investment approach that allocates capital to address the bottom of the pyramid is best described as:
Which of the following actors most likely engage with investee companies to improve their ESG performance?
According to the Taskforce on Nature-Related Financial Disclosures (TNFD) Biodiversity Framework, which of the following elements best reflects the close association between climate-related and nature-related risks and opportunities?
A governance structure that features non-board members on the nominations committee is most likely present in:
Which of the following principles is most likely understated in stewardship codes drafted by the fund management industry? The principle requiring investors to:
Which of the following statements about potential bias in ESG credit ratings is most accurate?
A portfolio approach in which bottom-up analysis is complemented with consideration of ESG factors, resulting in a relatively concentrated portfolio, is best described as:
Compared to public companies, creating private company scorecards is challenging as:
Which of the following is one of the four realms of nature described by the Taskforce on Nature-related Financial Disclosures (TNFD)?
Under the "shades of green" methodology developed by the Center for International Climate Research (CICERO), a bond that funds transition activities that do not lock in emissions is considered:
Which of the following parties is most likely to help investors identify the extent and depth to which investment funds integrate ESG?
The first step in the effective design of an investment mandate is determining the:
Which of the following most likely outlines an investment firm's ESG integration approach?
Which of the following ESG megatrends relates to issues around human rights, including free speech, and tensions between big social media companies and sovereign nation-states that point in the direction of a possible new ordering of societal power?
TESTED 30 Nov 2025
