ESG Considerations in Investment Analysis

ESG considerations have become increasingly relevant for which of the following reasons?

• Many in the new generation of investors are demanding that investment strategies incorporate ESG factors.

• ESG issues are not having more material financial impacts on a company’s fair value.

• Environmental and social issues are being treated as negative externalities.

Which of the following statements about environmental, social, and governance (ESG) in investment analysis is correct?

• ESG factors are strictly intangible in nature.

• ESG terminology is easily distinguishable among investors.

• Environmental and social factors have been adopted in investment analysis more slowly than governance factors.

________ uses shareholder power to influence corporate behavior to achieve targeted ESG objectives along with financial returns.

• ESG integration

• Engagement/Active ownership

• Corporate social responsibility

• Impact investing

• Sustainable finance

_______ investing is the umbrella term used to describe investment strategies that incorporate environmental, social, and governance (ESG) factors into their approaches.

• Traditional

• Sustainable

• Speculative

• ESG

• Responsible

An investor concerned about a publicly traded company’s data privacy and security practices would most likely incorporate which type of ESG factors in an investment analysis?

• Social

• Governance

• Environmental

The ESG investment approach that is most associated with excluding certain sectors or companies is:

• thematic investing.

• negative screening.

• positive screening.

Which ESG investment approach includes certain sectors, companies, or practices for investment using criteria based on the investor’s values, ethics, or preferences?

• Thematic investing

• Negative screening

• Positive screening

Which ESG investment approach could be associated with the 17 Sustainable Development Goals (SDGs) launched by the United Nations in 2015?

• Impact investing

• Engagement/active ownership

• Positive screening

________ argue that corporate governance should consider the interests of all stakeholders, not just shareholders.

• Market theory

• Stakeholder theory

• Shareholder theory

• Employee Mechanisms

• Agency theory

Which mechanism has become a powerful tool for Customer and Supplier?

• Regulations

• Social media

• Corporate Governance Codes