CEP ESG Principles & Regulatory Frameworks 3

Question 1

California's SB 253 (Climate Corporate Data Accountability Act) requires large companies operating in California to report Scope 1, 2, and 3 emissions starting in which year?

Accepted Answer

2026

Answer

Under SB 253, companies with over $1 billion in annual revenues must begin reporting Scope 1 and 2 emissions in 2026 (for fiscal year 2025 data), with Scope 3 following in 2027.

Question 2

Which principle underpins the 'S' in ESG and is defined by the UN as the right of people to freely determine their political status and pursue economic, social, and cultural development?

Accepted Answer

Self-determination

Answer

Self-determination, as articulated in the UN Declaration on the Rights of Indigenous Peoples and other instruments, is a foundational principle underlying social rights in the ESG framework.

Question 3

The International Sustainability Standards Board (ISSB) was established under which umbrella organization?

Accepted Answer

IFRS Foundation

Answer

The ISSB was established by the IFRS Foundation in November 2021 at COP26, tasked with developing a global baseline of sustainability-related disclosure standards.

Question 4

Under IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information), companies must disclose sustainability risks and opportunities that could reasonably be expected to affect which of the following?

Accepted Answer

The company's cash flows, access to finance, and cost of capital over the short, medium, and long term

Answer

IFRS S1 requires disclosure of sustainability-related information that could reasonably affect an entity's cash flows, access to finance, and cost of capital across short, medium, and long time horizons.

Question 5

Which ESG-related regulation requires EU financial market participants to classify investment products into Article 6, 8, or 9 categories based on their sustainability characteristics?

Accepted Answer

SFDR

Answer

The Sustainable Finance Disclosure Regulation (SFDR) classifies financial products: Article 6 (no sustainability claim), Article 8 (promotes environmental/social characteristics), and Article 9 (sustainable investment objective).

(CEP) Certified Environmental, Social, and Governance (ESG) Planner Practice Test

(CEP) Certified Environmental, Social, and Governance (ESG) Planner Practice Test

CEP ESG Principles & Regulatory Frameworks 3