ESG and climate risk in finance

Which of the following is NOT a characteristic of sustainable finance?

• It promotes clear and complete disclosure of financial and non-financial information.

• It focuses on ESG factors, but does not consider profitability issues.

• It can channel funds to projects aimed at alleviating poverty.

• It has a long-term perspective.

 

Which of the following is a common characteristic of CSR and ESG?

• Both take into account sustainability issues.

• Both use quantitative metrics and clearly measurable objectives.

• Both are compulsory in many developed countries.

• Both concepts are equally popular nowadays.

What are the current sustainable development priorities?

• Corporate Social Responsibility and Socially Responsible Investing.

• The Millenium Development Goals and the Paris Agreement.

• The Sustainable Development Goals and the Paris Agreement.

• The Kyoto Protocol and the Sustainable Development Goals.

Which of the following is NOT a sustainable development goal targeted to be achieved by 2030?

• Gender equality.

• Zero hunger.

• Space research.

• Good health and wellbeing.

What is the main goal of the Paris Agreement?

• Reduce greenhouse gas emissions by 50% by 2030.

• Eliminate the use of fossil fuels by 2050.

• Increase reforestation by 25% by 2040.

• Limit the global temperature increase to less than 2 °C above pre-industrial levels.

Which of the following is true about the ESG rating agencies?

• They provide information about the financial performance of corporations.

• They consider stakeholder interests, such as employees, suppliers, customers, local community or the environment.

• They are now less important than in the past.

• Currently, there is only one ESG rating agency, which is called MSCI.

How can the banking sector contribute to the achievement of the Sustainable Development Goals?

• By financing industries that are aligned with the objectives of the energy transition.

• By offering women´s microcredit in developing areas.

• By channeling funds towards socially responsible industries.

• All the answers are correct.

ESG strategies might benefit banks in terms of:

• Increased market volatility.

• Lower transparency requirements.

• Less need for financial innovation.

• Better risk management.

If climate risks deteriote the ability of borrowers to repay loans, it will affect more directly:

• The credit risk of banks.

• The operational risk of banks.

• The legal risk of banks.

• The transition risk of banks.

Regarding banks´exposure to climate risks:

• It can be quantified through well-defined and standard measures.

• It only depends on the home country of the banks.

• We can use the carbon-weighted Herfindahl index to analyze banks´ exposure to transition risks.

• It is not very relevant because banks hardly generate carbon footprint.