CSR - Corporate Social Responsibility Socially Responsible Investing Questions and Answers

Question 1

An investment fund manager makes a policy decision to exclude all companies that derive more than 5% of their revenue from the sale of tobacco products. This strategy is best known as what?

Accepted Answer

Negative Screening

Answer

ESG Integration

Answer

Impact Investing

Answer

Shareholder Activism

Question 2

An analyst is evaluating two energy companies. In addition to traditional financial metrics, the analyst incorporates data on the companies' carbon emissions intensity, water stress risks, and board diversity policies to adjust their valuation models and inform their investment decision. This approach is a primary example of:

Accepted Answer

ESG Integration

Answer

Thematic Investing

Answer

Positive Screening

Answer

Divestment Campaign

Question 3

Which of the following is the defining characteristic that distinguishes 'impact investing' from other forms of socially responsible investing?

Accepted Answer

The explicit intention to generate a specific, measurable social or environmental benefit alongside a financial return.

Answer

The exclusion of controversial industries like weapons manufacturing.

Answer

The active use of proxy voting to influence corporate policy.

Answer

The primary focus on investing in companies with the highest ESG ratings in their sector.

Question 4

A group of socially conscious investors who own shares in a major corporation collectively files a formal proposal for the company's annual meeting, requesting that the board issue a report on its political lobbying activities related to climate change. This action is an example of which SRI strategy?

Accepted Answer

Shareholder Advocacy

Answer

Negative Screening

Answer

Community Investing

Answer

Best-in-class Investing

Question 5

A portfolio manager wants to include the technology sector in their SRI fund but is concerned about the industry's energy consumption. Instead of excluding the entire sector, they decide to only invest in the top 10% of technology companies that demonstrate the most efficient use of renewable energy and have the strongest data privacy policies. This investment selection method is best described as:

Accepted Answer

Positive Screening

Answer

Impact Investing

Answer

Thematic Investing

Answer

Exclusionary Screening

Question 6

When an investor is analyzing the 'S' (Social) component of a company's ESG performance, which of the following issues would be a primary focus?

Accepted Answer

Labor standards and employee health and safety within the supply chain.

Answer

The composition and independence of the board of directors.

Answer

The company's policies on greenhouse gas emissions.

Answer

Executive compensation and shareholder rights.