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
A mining company identifies tailings dam failure as a key environmental risk. Which risk management approach best reflects 'risk transfer' for this exposure?
Answer: Purchasing environmental liability insurance for dam failure events
Risk transfer shifts the financial consequences of a risk to a third party, most commonly through insurance, without eliminating the underlying hazard.
The 'circular economy' principle that differs most fundamentally from traditional linear manufacturing is:
Answer: Designing products so materials can be recaptured and reused at end-of-life
Circular economy models are built on closing material loops through design for disassembly, reuse, remanufacturing, and recycling rather than disposal.
When applying the GHG Protocol's market-based method for Scope 2 emissions, a company can report zero emissions if it:
Answer: Holds Energy Attribute Certificates (EACs) covering 100% of its electricity consumption
The market-based method allows zero Scope 2 emissions only when the company holds valid EACs (e.g., RECs or GOs) matching 100% of its electricity consumption for the reporting period.
Which of the following best describes 'greenwashing' in the context of ESG reporting?
Answer: Making unsubstantiated or misleading environmental claims to appear more sustainable than actuality
Greenwashing involves presenting false, exaggerated, or selective environmental credentials to mislead stakeholders about a company's true sustainability performance.
A port authority wants to quantify biodiversity impact from dredging operations. Which metric from the TNFD framework is most relevant?
Answer: Mean Species Abundance (MSA) change in the affected marine area
Mean Species Abundance (MSA) measures the intactness of local biodiversity relative to an undisturbed reference state and is a core impact metric endorsed by the TNFD.
Under OSHA's Process Safety Management (PSM) standard, which environmental risk scenario triggers coverage?
Answer: Use of a listed highly hazardous chemical at or above its threshold quantity
OSHA PSM (29 CFR 1910.119) applies when a facility holds a listed highly hazardous chemical at or above the specified threshold quantity, regardless of release occurrence.
The concept of 'stranded assets' in ESG risk analysis most directly refers to:
Answer: Fossil fuel reserves or related infrastructure that may lose economic value due to climate policy or technology shifts
Stranded assets are fossil fuel reserves, production assets, or related infrastructure rendered economically unviable by carbon regulation, energy transition, or physical climate impacts.