Environmental Sustainability & Risk Management Flashcards
7 cards from real ESG practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Environmental Sustainability & Risk Management flashcards as text
The Science Based Targets initiative (SBTi) requires a company's near-term Scope 1 and 2 targets to be consistent with limiting global warming to:
Answer: 1.5°C above pre-industrial levels
SBTi's updated criteria require near-term targets to align with a 1.5°C pathway, consistent with the ambition of the Paris Agreement.
In a lifecycle assessment (LCA), the 'functional unit' is defined to:
Answer: Provide a quantified reference for comparing products with the same function
The functional unit quantifies the primary function delivered by the product system, enabling a like-for-like comparison between alternative systems.
Which biodiversity accounting standard assigns monetary or quantitative values to ecosystem services affected by a business operation?
Answer: Natural Capital Protocol
The Natural Capital Protocol provides a standardized framework for businesses to identify, measure, and value their impacts and dependencies on natural capital including ecosystem services.
A company's carbon intensity metric is best defined as:
Answer: GHG emissions per unit of economic or physical output
Carbon intensity normalizes emissions against a unit of output (e.g., revenue or production volume), enabling performance benchmarking across companies of different sizes.
Under the EU Taxonomy Regulation, for an economic activity to qualify as environmentally sustainable it must:
Answer: Substantially contribute to at least one objective and do no significant harm to others
EU Taxonomy criteria require substantial contribution to at least one of six environmental objectives while not significantly harming any other, and meeting minimum social safeguards.
Which tool is most appropriate for assessing a company's exposure to chronic physical climate risk over a 30-year time horizon?
Answer: Climate scenario analysis using IPCC Representative Concentration Pathways
Climate scenario analysis using established pathways such as RCP 4.5 or RCP 8.5 is designed to quantify long-term physical risk under different temperature trajectories.
An ESG consultant recommends an internal carbon price to a client. The primary strategic purpose of this tool is to:
Answer: Internalize the cost of carbon into capital allocation and project decisions
An internal carbon price embeds the cost of carbon into business decision-making, incentivizing investments in low-carbon alternatives before regulatory carbon pricing is imposed.