Practice Test Geeks(ESG) Certified Environmental, Social, and Governance Consultant Practice Test
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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

  1. A company claims its product is 'carbon neutral.' Under ISO 14068, which condition must be satisfied?

    Answer: Full LCA-based quantification of emissions followed by verified offsetting of residual emissions

    ISO 14068 (Carbon Neutrality) requires a complete footprint quantification across the relevant lifecycle stages, reduction of emissions, and neutralization of any residual emissions through high-quality carbon credits.

  2. Which regulatory mechanism is specifically designed to prevent 'carbon leakage' by placing a carbon price on imports from countries with less stringent climate policies?

    Answer: Carbon Border Adjustment Mechanism (CBAM)

    The EU's Carbon Border Adjustment Mechanism (CBAM) imposes a carbon cost on certain imported goods to prevent companies from relocating production to avoid domestic carbon pricing.

  3. An ESG analyst is stress-testing a portfolio against a 2°C warming scenario. Which asset class faces the highest transition risk?

    Answer: Thermal coal mining companies

    Thermal coal mining companies face the greatest transition risk because demand for coal is most severely curtailed in low-carbon scenarios through fuel switching and carbon pricing.

  4. The 'mitigation hierarchy' in environmental risk management requires companies to prioritize actions in which order?

    Answer: Avoid → Minimize → Restore → Offset

    The mitigation hierarchy follows Avoid → Minimize (reduce) → Restore → Offset, with avoidance as the most preferred approach and offsetting as the last resort.

  5. Which of the following correctly describes the relationship between the GRI Standards and the SASB Standards?

    Answer: GRI focuses on broad stakeholder impact disclosure while SASB focuses on industry-specific financially material metrics for investors

    GRI is designed for multi-stakeholder impact reporting across economic, environmental, and social dimensions, while SASB provides industry-specific metrics tailored to investor-focused financial materiality.

  6. A real estate investment trust (REIT) wants to assess climate-related physical risk to its property portfolio. Which data source is most appropriate for quantifying flood risk at asset level?

    Answer: FEMA National Flood Hazard Layer combined with downscaled climate projections

    Asset-level flood risk assessment requires spatially specific flood hazard data; FEMA flood maps combined with forward-looking climate downscaling provide the most granular and actionable exposure data.

  7. Under the Task Force on Nature-related Financial Disclosures (TNFD), the LEAP approach guides companies through which sequence of steps?

    Answer: Locate, Evaluate, Assess, Prepare

    TNFD's LEAP approach stands for Locate (interface with nature), Evaluate (dependencies and impacts), Assess (material risks and opportunities), and Prepare (strategy and disclosure).