ESG Frameworks & CSRD Flashcards
7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 ESG Frameworks & CSRD flashcards as text
What is the key distinction between 'greenwashing' and legitimate ESG reporting under frameworks like GRI or ESRS?
Answer: Greenwashing involves misleading or unsubstantiated sustainability claims; legitimate reporting is verified and material
Greenwashing refers to misleading, vague, or unsubstantiated sustainability claims, while legitimate ESG reporting is based on material, verifiable data disclosed under recognized standards.
Under CSRD, what level of assurance is initially required for sustainability information reported by companies?
Answer: Limited assurance, with the goal of moving to reasonable assurance
CSRD initially mandates limited assurance over sustainability disclosures, with the European Commission to assess moving toward reasonable assurance in future years.
Which ESRS standard addresses governance disclosures, including board oversight of sustainability matters?
Answer: ESRS 2
ESRS 2 (the cross-cutting general disclosures standard) requires information on governance, strategy, and risk management related to sustainability, including board-level oversight.
A company claims its product is 'carbon neutral' based solely on purchased offsets without reducing emissions. Which ESG principle does this most likely violate?
Answer: The mitigation hierarchy, which prioritizes emission reductions before offsets
The mitigation hierarchy requires companies to reduce emissions first and use offsets only for residual emissions, so relying solely on offsets without reduction efforts is inconsistent with credible net-zero claims.
How does the SEC's climate disclosure rule (finalized 2024) compare to CSRD in scope?
Answer: SEC rule covers fewer topics than CSRD, omitting mandatory Scope 3 and social disclosures
The SEC's 2024 climate rule is narrower than CSRD — it focuses on climate risk and Scopes 1/2 (with Scope 3 dropped), and does not mandate social or governance sustainability disclosures.
In the context of ESG frameworks, what does 'Scope 3 Category 15' refer to?
Answer: Investments — financed emissions from loans, equity, and bond portfolios
GHG Protocol Scope 3 Category 15 covers investments, including emissions financed through equity investments, debt, and project finance — highly relevant for financial institutions.
Which EU taxonomy-related concept requires companies to disclose what share of their revenue, capex, and opex aligns with environmentally sustainable activities?
Answer: Taxonomy Alignment Reporting under Article 8 of the EU Taxonomy Regulation
Article 8 of the EU Taxonomy Regulation requires non-financial companies to disclose the proportion of their turnover, capex, and opex associated with taxonomy-aligned activities.