Practice Test Geeks(CEP) Certified Environmental, Social, and Governance (ESG) Planner Practice Test
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Sustainable Finance & ESG Investing Flashcards

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  1. What is a green bond primarily used to finance?

    Answer: Climate and environmental projects

    Green bonds are fixed-income instruments specifically earmarked to raise money for climate and environmental projects.

  2. Which organization developed the Green Bond Principles (GBP)?

    Answer: International Capital Market Association (ICMA)

    The International Capital Market Association (ICMA) developed the Green Bond Principles, which provide voluntary process guidelines for issuing green bonds.

  3. What does 'ESG integration' mean in an investment context?

    Answer: Incorporating ESG factors alongside financial analysis in investment decisions

    ESG integration refers to the systematic inclusion of ESG factors alongside traditional financial analysis to better identify material risks and opportunities.

  4. Which of the following best describes 'impact investing'?

    Answer: Investing with the intention to generate positive, measurable social and environmental impact alongside financial returns

    Impact investing aims to generate positive, measurable social and environmental outcomes alongside financial returns, distinguishing it from purely profit-driven strategies.

  5. What is the primary purpose of the Task Force on Climate-related Financial Disclosures (TCFD)?

    Answer: To provide a framework for companies to disclose climate-related financial risks and opportunities

    TCFD provides a voluntary framework helping companies disclose consistent, comparable, and reliable information about climate-related financial risks and opportunities to investors.

  6. What is a Social Impact Bond (SIB)?

    Answer: A contract in which private investors provide upfront capital for social programs, with returns tied to achieving specific outcomes

    Social Impact Bonds are outcome-based contracts where private investors fund social programs upfront, and government repays with returns only if pre-agreed social outcomes are achieved.

  7. What does 'negative screening' in ESG investing involve?

    Answer: Excluding certain industries or companies from a portfolio based on ESG criteria

    Negative screening (also called exclusionary screening) deliberately excludes certain sectors, companies, or practices from investment portfolios based on ESG criteria or values.