ESG Investing and Client Mandates Quiz

Why is mandate construction important for the effective delivery of ESG investing?

• To maximize short-term returns

• To exclude ESG factors from investment decisions

• To align investment with client ESG beliefs

• To minimize risk in the portfolio

What are the common features of ESG investing that asset owners and intermediaries seek to identify through RFP and selection processes?

• Screening process

• All of the above

• Examples of decision making

• Voting and engagement

What is the first step in the effective design of a mandate for ESG investing?

• Aligning investment with client ESG beliefs

• Tailoring ESG investment approach to client expectations

• Holding managers to account

• Clarifying client needs and defining the ESG investment strategy

How can ESG screens be embedded within investment mandates to generate investment returns and manage portfolio risk?

• By excluding all ESG factors from the investment process

• By integrating ESG factors into investment decision making

• By focusing only on short-term returns

• By ignoring the impact of ESG factors on the portfolio

What are the elements of sustainable investing according to the McKinsey article?

• Investment mandate, investment operations enablers, public reporting

• Investment operations enablers, resources and organization, public reporting

• Tools and processes, resources and organization, public reporting

• Investment mandate, investment beliefs and strategy, investment operations enablers

What are the key questions that frame the operationalization of ESG considerations in an asset owner’s investment approach?

• How to exclude ESG factors from the investment process

• How to ignore the impact of ESG factors on the portfolio

• Are ESG factors more important for risk management or value creation? What ESG factors are material?

• How to maximize short-term returns and minimize risk

What is the purpose of an ESG policy for fund managers?

• To train and shape the mindset of the investment teams

• To focus only on short-term returns

• To highlight the lack of relevance of responsible investment norms and principles

• To ignore the impact of ESG factors on the portfolio

What are the elements covered by the ICGN Model Contract Terms between Asset Owners and Managers for ESG-aware investment mandates?

• Monitoring and use of ESG factors, integration of ESG factors, adherence to good practice around stewardship, voting and reporting requirements

• Monitoring and use of ESG factors, exclusion of ESG factors, short-term investment strategies, financial analysis

• Monitoring and use of ESG factors, integration of ESG factors, exclusion of ESG factors, engagement with companies

• Integration of ESG factors, exclusion of ESG factors, engagement with companies, public reporting

What is the relevance of ESG factors in the investment process according to RBC Global Asset Management?

• ESG factors are only used for negative screening

• ESG factors are irrelevant for financial analysis

• ESG factors are considered as non-traditional sources of risk and opportunity

• ESG factors are not integrated into the company assessment

What is the investment process underpinning the differentiated thinking about the dynamics that drive and influence the performance of companies according to Generation Investment Management?

• A process that excludes ESG factors from investment decisions

• A process that constructs portfolios of sustainable companies with deep research and analysis

• A process that ignores the impact of ESG factors on the portfolio

• A process focused on short-term gains