ESG ESG Climate Change & Carbon Management 3

Question 1

What is a 'low-carbon transition risk' for a utility company with coal-fired power plants?

Accepted Answer

Financial risk from carbon pricing, early asset retirement, and stranded coal assets as the grid decarbonizes

Answer

Physical risk from hurricanes damaging coal plants

Answer

The risk that renewable energy fails to replace coal capacity

Answer

Labor market risk from coal miners transitioning to other jobs

Question 2

What does the concept of 'just transition' add to corporate climate strategy?

Accepted Answer

Ensuring that the move to a low-carbon economy protects workers and communities dependent on high-carbon industries

Answer

Ensuring that carbon markets are accessible to all countries

Answer

A legal requirement to transition to renewable energy by 2030

Answer

A carbon pricing mechanism that distributes revenues equitably

Question 3

What is 'avoided emissions' reporting and why is it controversial?

Accepted Answer

Claiming credit for emissions customers avoid by using a company's lower-carbon products, without reducing the company's own footprint

Answer

Reporting emissions reductions from efficiency improvements in operations

Answer

Measuring emissions that regulatory compliance has prevented

Answer

Calculating emissions avoided through supply chain optimization

Question 4

What is 'carbon border adjustment mechanism' (CBAM) and its ESG significance?

Accepted Answer

A trade policy tool (e.g., EU's CBAM) that imposes a carbon cost on imports from countries with weaker carbon pricing, affecting supply chain ESG strategy

Answer

A technique for adjusting carbon accounting at corporate boundaries

Answer

A mechanism for adjusting carbon targets based on national borders

Answer

A border security system for monitoring carbon credit fraud

Question 5

What is 'absolute contraction' in the context of corporate emissions targets?

Accepted Answer

Reducing the total volume of greenhouse gas emissions by a fixed percentage regardless of business growth

Answer

Reducing the size of corporate operations to lower emissions

Answer

Contracting with third parties to absorb a company's absolute emissions

Answer

The opposite of carbon intensity improvement—absolute reduction in emissions

Question 6

Which international body developed the Common Reporting Format for national greenhouse gas inventory reporting under the UNFCCC?

Accepted Answer

UNFCCC Secretariat / IPCC Good Practice Guidance

Answer

WMO

Answer

IPCC

Answer

ISO Technical Committee 207