SCR Exam - With Answers

- Expert Verified, Online, Free.
 Custom View Settings
Topic 1 - Exam A
Question #1 Topic 1
A climate scientist develops a presentation on modern climate change for a group of policymakers.
What observation does the scientist include in the presentation that provides evidence of human attribution to current climate change?
A. Atmospheric CO2 with isotopes consistent with fossil fuel emissions have increased since the mid-20th century.
B. Glacial ice records indicate atmospheric CO2 increased by 135 parts per thousand since the Industrial Revolution.
C. In the past 200 years, CO2 is responsible for most negative radiative forcing.
D. In the past 100 years, the atmospheric lifetime of CO2 attributed to energy use increased.
Correct Answer: A
  agarwalprakash 3 weeks, 6 days ago

The correct statement is that atmospheric CO2 concentrations have increased by approximately 135 parts per million (ppm)
upvoted 1 times
  SCRnow 3 weeks, 6 days ago

B is NOT ok. ppm = parts per million, not parts per thousand
upvoted 2 times
  Allexa 1 month ago

Also B it is ok.
upvoted 1 times
Question #2 Topic 1
The risk team at an agricultural company in Easter Europe evaluates crop yield production performance. The evaluation reveals high temperature
and water shortages will likely harm crop production, and current company insurance will not mitigate this exposure. The team recommends
increasing coverage by purchasing an additional insurance policy that includes area yield protection.
According to the COSO ERM framework, which risk response strategy did the team recommend?
A. Pursuit
B. Sharing
C. Reduction
D. Acceptance
Correct Answer: C
Community vote distribution

B (100%)
  CecileC 3 weeks ago

Selected Answer: B
From COSO's framework - "Sharing is a response that reduces the risk likelihood and impact by sharing a portion of the risk. An extremely
common sharing response is insurance." So the answer should be B.
upvoted 1 times
  SolMak 3 weeks, 2 days ago

Insurance is risk sharing
upvoted 1 times
Question #3 Topic 1
A city planning commissioner consults with climate scientists to assess the impact of sea level rise on strategic infrastructure projects. The
scientists discuss several climate model projections and indicate sea level rise has a fundamental relationship to GHG emissions, regardless of a
specific warming scenario.
How should the scientists describe this relationship?
A. Sea level rises proportionally faster than GHG emissions.
B. Sea level rise lags GHG emissions.
C. Sea level rises in response to ocean acidification.
D. Sea level rise will cease once global emissions peak.
Correct Answer: B
Question #4 Topic 1
After recent summer and winter temperature extremes disrupt operations, a national oil company evaluates its 10-year business plan. The risk
department reviews how corporate assets, both physical and human, are resilient to climate change. Early in the planning process, a risk team
member emphasizes the importance of planning for both acute and chronic climate hazards.
How should the team member describe acute and chronic hazards in terms of the 10-year strategy?
A. When determining locations for future production facilities, modeling shifts in climate requires more data on local conditions than modeling
changes in wildfire prevalence.
B. When assessing climate impacts on facility worker productivity, the frequency of heatwaves influences average temperature.
C. When assessing climate impacts on offshore drilling operations, models of hurricane damage agree more than models of sea level rise.
D. When considering climate impacts on onshore assets, flood projections are more accurate than mean precipitation change projections.
Correct Answer: D
Question #5 Topic 1
A global cosmetics company surveys consumers. The survey reveals close to 75% of consumers indicate sustainability is an important issue and
are willing to change shopping habits to reduce environmental impact. The company responds by establishing a sustainability framework. As part
of the process to implement this framework, a company sustainability analyst identifies sustainable investment and disclosure practices.
Which recommendation will the analyst likely make to implement a company sustainability framework?
A. Follow NGFS sustainability best practices and verify company products and activities are considered sustainable through NGFS
recommended voluntary disclosures.
B. Use the EU Taxonomy for classifying products as “green” when doing business in the EU market but develop new classification systems for
jurisdictions outside the EU.
C. Conduct internal audits annually and disclose any greenwashed product findings to government green finance taskforces.
D. Incorporate mandatory disclosures and marketing requirements to ensure claims about sustainable products are fair and not misleading.
Correct Answer: D
Question #6 Topic 1
To improve sustainability, a railroad and transportation services company will revitalize its rail network by installing an operating system that
reduces idle time. A reduction in idle time will decrease GHG emissions. To finance this plan, the company will issue green bonds beginning in
2024. The company sustainability director develops sustainability objectives and eligibility criteria to communicate to investors.
The director is fulfilling which core component of the Green Bond Principles?
A. Process for project evaluation and selection
B. Reporting
C. Management of proceeds
D. Use of proceeds
Correct Answer: A
Question #7 Topic 1
A large insurance company in South America expands use of climate scenario analysis. The company used RCPs in previous scenario analyses
but now hires an actuary with climate expertise to incorporate SSPs in this process.
How can the actuary advise the insurance company use SSPs going forward?
A. Demonstrate how SSP and RCP trajectories typically show contradictory emissions trend trajectories.
B. Combine SSPs with different RCPs to assess climate policy options.
C. Eventually replace SSPs with RCPs by integrating underlying data assumptions.
D. Use SSPs to provide alternative emissions pathways to RCPs.
Correct Answer: D

Selected Answer: B
B is correct.
upvoted 1 times
  Aziz09081 3 weeks, 3 days ago

Agree B is correct
upvoted 2 times
  Budhia 3 weeks, 6 days ago

B is the correct answer
upvoted 4 times
Question #8 Topic 1
A climate risk consultant advises an Eastern European central bank. In response to regulatory changes, the bank will incorporate climate-related
risks into bank policies. The consultant writes a summary on how central banks incorporated climate-related risks into policies. The summary
highlights the Bank of England (BoE) example to demonstrate how the BoE integrated climate-related risks within the bank supervisory scope.
Which of the following BoE practices will the consultant recommend?
A. Integrate climate-related risks into bank monetary policy before attempting to integrate climate into other areas of bank operations.
B. Obligate firms to allocate responsibility for climate-related risks using a bottom-up approach where the risk team assesses climate risks
while the board of directors approves or denies.
C. Require banks and insurers include all material exposures relating to financial risks from climate change under capital adequacy and
solvency assessments.
D. Adopt a policy that requires firms to submit climate risk disclosures that precisely follow NGFS guidelines.
Correct Answer: C
Question #9 Topic 1
A sustainability analyst for a global food and beverage company tracks ESG metrics to report to investors. The analyst meets with company
leaders of different business units to explain criteria and indicator types for each ESG component.
To address each component, which metrics will the analyst socialize with company leaders?
A. Carbon dioxide emissions; labor conditions of agricultural workers; board diversity
B. Environmental health and safety record; adherence to code of ethics; risk management protocols
C. Water use efficiency; employee retention and satisfaction; community engagement
D. Energy use; GHG intensity reduction; executive leadership compensation
Correct Answer: B
  Chanelle 2 weeks, 6 days ago

A hits all three - Environmental, Social and Governance
upvoted 1 times
  Dunjeon_Master 3 weeks, 4 days ago

A is the correct option
upvoted 2 times
  Karnitschnig 3 weeks, 6 days ago

Selected Answer: A
Why is B better than A. Question is poor
upvoted 2 times
Question #10 Topic 1
In response to policy and technology changes, a cement manufacturer looks for new opportunities to raise profits by reducing GHG emissions.
Because the cement industry accounts for a considerable percentage of global emissions, the manufacturer joins a coalition of company peers.
The coalition lobbies country governments to adhere to the Paris Agreement nationally determined contributions (NDCs).
Which of the following actions does the coalition recommend?
A. Aligned the first round of NDCs with a 2°C warming limit, followed by a second round of a 1.5°C limit.
B. Set 2019-2022 NDCs at a smaller scale to comply with the “ratchet” mechanism.
C. Tighten NDCs and report NDC progress every 5 years at COP meetings.
D. Revise NDC targets annually and submit to the UN for review and approval.
Correct Answer: C
An insurance firm announces it will adopt sustainable practices. To inform sustainable strategy, a company risk analyst researches climate risk.
The analyst reviews how climate risk manifests as financial risk through effects on microeconomic company-level risks on various types of
companies and institutions. The analyst also identifies possible opportunities resulting from climate risk. Risks and opportunities are presented to
senior management.
Which of the following does the analyst cite as an example of how climate risk affects liquidity risk?
A. A company’s warehouse that is damaged by a tornado causes business interruption that results in loss of revenues and profits, which
weakens the company’s ability to repay loans.
B. A mining company that extracts lithium for lithium-ion batteries benefits from higher commodity prices, which increases revenue and
profits.
C. A company’s high-emissions factory is hit with a higher carbon tax that results in asset stranding, which causes the company to have less
collateral to use to secure funding.
D. A bank’s customers withdraw deposits and draw on credit lines to finance cash-flow needed for recovery after damaging flooding, which
increases loan-to-deposit ratios.
Correct Answer: D
An investment analyst assesses climate-related stranded asset risk for a portfolio of energy companies. The analyst develops a list of companies
potentially exhibiting stranded asset risk. After a more granular examination, the analyst summarizes corporate activity in the following table:
The analyst identifies the company with the highest stranded asset exposure for possible divestment. Which company does the analyst
recommend for divestment?
A. Utility
B. Oil & Gas
C. Technology startup
D. Hydroelectric
Correct Answer: B
  sbrudersohn 3 weeks, 1 day ago

Selected Answer: B
I agree with the chosen answer i.e. B:
(6.3.2. pg 124) The oil & gas sector is a good example of a sector that has been hit by the stranded asset transmission channel. His-torically,
much of the value of such firms has been in their reserves and the expectation of their consistent or grow-ing revenues. The fact that many of
these firms’ assets may become stranded and that oil demand is expected to fall means that these firms may become less creditworthy than
they would in the absence of climate change.
upvoted 1 times

Poorly phrased answer. I suspect they meant write-off on oil reserves due to legal / reg changes (Transition risk materialized)
upvoted 1 times

C should also be correct. Sustained draughts due to climate change = chronic physical risk = qualifies for stranding assets. Premature shut down
= write off.
upvoted 1 times

Selected Answer: C
C is an actual stranded asset. B is not.
upvoted 1 times
A climate analyst at a research institution analyzes climate risk for various companies. The analyst examines transmission channels of climate
risk as part of the risk identification process.
Which of the following examples can the analyst use to describe an operational risk transmission channel?
A. A damaging hurricane leads to a run on credit as affected communities need cash to fund recovery efforts.
B. Following a high carbon tax, a company strands high-emissions assets.
C. High commodity prices boost revenues for a mining company that extracts lithium.
D. Flooding damages an information technology company data center.
Correct Answer: D

The question is not clear whether it's about "operation risk channeled from physical risk" or "any other risk channeled through operation risk".
upvoted 1 times

POORLY FRAMED IT SHOULD BE A
upvoted 1 times
  SCR_Fighter 3 weeks, 2 days ago

I agree the answer should be D, A is related to credit risk instead
upvoted 2 times

Indeed, this is operational risk channelled through physical risk (pg. 121)
upvoted 1 times
In preparation for an upcoming global climate conference, organizers develop climate science training materials for business executives.
How should the training material compare anthropogenic and natural climate changes?
A. Human-caused warming is occurring much faster than natural warming after the last ice age.
B. Human-induced warming currently exhibits a nonlinear relationship with global CO2 levels, whereas natural warming shows a linear
relationship.
C. Human activities slowed water vapor feedback, whereas natural climate changes do not alter water vapor balance.
D. Human activities caused temperature changes greater than any previous natural temperature changes.
Correct Answer: D
  goodforme Highly Voted  2 months, 1 week ago

Selected Answer: A
For example, the warming over the past century (approximately 1°C in about a century) is around 16 times faster than the average rate of
warming coming out of the last ice age (roughly 6°C in 10,000 years corresponds to an average warming of 0.06°C/ century).
upvoted 6 times
  sbrudersohn Most Recent  3 weeks, 1 day ago

Selected Answer: D
The key is indeed the "since ice age" statement.
upvoted 1 times
  Riskr 3 weeks, 3 days ago

D is correct. The key is in the statement 'since ice age'. Human related warming is proven to be only since 20th century.
upvoted 2 times
  SCR23 1 month, 2 weeks ago

Selected Answer A not D: Global average temperature difference between an ice age and an interglacial is 6°C.
upvoted 3 times
A senior sustainability consultant at an African think tank explains the complexities of different Earth science systems to a group of ESG
practitioners as part of the think tank’s continuing education program.
Which of the following statements by the sustainability consultant accurately describes the Earth’s greenhouse effect?
A. A natural process in which the Earth’s oceans absorb the majority of non-reflected incoming solar energy
B. A natural process in which the Earth reflects three-quarters of incoming solar energy back into space
C. A human-driven process that is the main contributor for half of the sea-level rise in the past 200 years
D. A human-driven process in which the main contributor is the decrease in the albedo effect
Correct Answer: D

All options are incorrect however the answer D is the 'most' appropriate one
upvoted 1 times

all options are incorrect
upvoted 1 times

None of answers describes the natural process called GH effect. Answer A describes a consquence of the radiative forcing due to increased CO2
/ temperature in the atmosphere and is thus probably better than answer D, which is wrong.
upvoted 2 times
  Samastiti 1 month, 3 weeks ago

It is not correct : GH effect is a natural phenomenon where certain gases in the Earth's atmosphere trap and retain heat
upvoted 4 times
A major hurricane extensively damages the electrical infrastructure of a utility company. To improve the utility’s risk management, the risk director
prepares a strategy plan and incorporates climate risk considerations within the existing risk management framework.
Which recommendation should the director make to incorporate climate risk into the framework’s risk identification component?
A. Evaluate the vulnerability and adaptive capacity of facilities using data gathered on the scope of climate risks.
B. Flag any substantial changes in the utility’s external environment to trigger a modification of the risk management process.
C. Examine the transmission channels of climate risk drivers into financial risk to determine which risks are likely to materialize for the utility.
D. Rate risks on impact and level of control to focus on risks with the most severe impact but over which the utility has the most control to
improve outcomes.
Correct Answer: A
  2shig 3 weeks, 5 days ago

It is A. Because the issue is physical risks. Be careful with voted answers.
upvoted 3 times

A is wrong. A is within the 2nd step of COSO ERM as it's more about defining risk appetite. Risk identification is within the 3rd step of COSO
ERM.
upvoted 1 times
  sbrudersohn 3 weeks, 6 days ago

Selected Answer: C
Risk identification starts with examining the transmission channels of climate risk drivers into financial risk (Sections 6.2–6.4) and then identifying
which of these are the most relevant for a particular organization.
upvoted 1 times

@goodforme: There is no indication, that the company is applying the COSO ERM Framework and also "Performance" component is not the
question here (which consists of Risk identification, Risk assessment and risk prioritization). Answer A seems more plausible. Physical Risk is a
result of potential harm (e.g. storm) exposure (location where hurricans occur) and understanding vulnerability is vital, so you can take measures
(mitigate, adapt, etc.)
upvoted 2 times

Selected Answer: C
Risk identification starts with examining the transmission channels of climate risk drivers into financial risk
upvoted 2 times
  goodforme 2 months, 1 week ago

Selected Answer: C
Risk identification starts with examining the transmission channels of climate risk drivers into financial risk (Sections 6.2–6.4) and then identifying
which of these are the most relevant for a particular organization.
upvoted 3 times
The national meteorological agency of a small African nation forms a team to identify and assess extreme climate events in the region. The team
leader introduces extreme attribution science along with data and techniques used to connect climate change to extreme events.
To attribute extreme events to climate change, what information will be most useful for the team to collect?
A. Statistical analysis of historic drought occurrences
B. Future projections of global emissions
C. Cross-hatching that indicates climate model agreement
D. Community exposure to increased flooding events
Correct Answer: A
A large family-owned agrichemicals company in South America will produce its first sustainability report. The company hires a consultant to
manage this process and familiarize all owners with current practices and historical precedents of social responsibility.
How should the consultant describe the evolution of the social responsibility of business over the past 50 years?
A. Emphasizing good governance toward resource and energy efficiency to improve operations
B. Investor-led focus on environmental metrics toward a broader focus on reducing poverty and societal disparities globally
C. Corporate prioritization of economic growth toward recognizing obligations to improve nonfinancial outcomes for society
D. Corporate self-regulation toward increasing government responsibility for social issues
Correct Answer: C

c is correct
upvoted 1 times
  2shig 3 weeks, 5 days ago

A: governance
B: Environment
D: We all have responsibilities toward social issues.
C: Correct, because over the past years, it has become increasingly common to think social contribution impacts sustainability. It makes sense
that you want to help others out, especially if you are a wealthy family with a business otherwise our current system won't last. Plus, the
questions is clearly asking for social responsibilities.
upvoted 2 times

CSR - Corporate Social Responsibility
upvoted 1 times
  Romapretty 1 month ago

where does this come from, any idea?
upvoted 1 times

The other answers don't really make sense. But here I think they are referencing the triple bottom line
upvoted 1 times
A mid-size bank in Australia will implement scenario analysis as part of a risk assessment to measure climate risk. A risk manager in charge of
this project reviews current practices among peers worldwide.
To align with common and well-established practices of financial firms, how will the risk manager implement scenario analysis to assess climate
risk?
A. Create inclusionary criteria for investments based on climate risk
B. Provide ex-ante climate risk analysis to national regulators
C. Compare the likelihood of physical and transition risks
D. Examine portfolio-level exposures in various climate outcomes
Correct Answer: C

Selected Answer: C
C can't be right.
upvoted 1 times

D seems correct, again a wrong options given as correct answer
upvoted 1 times
  sbrudersohn 3 weeks, 6 days ago

Selected Answer: D
An important use case of scenario analysis in the financial sector is to examine portfolio-level exposures, and gauge how these would vary in
different climate outcomes (i.e., scenarios)
upvoted 1 times

Selected Answer: D
Scenario Analysis is used to see how the company or portfolio will do in various situations. It is not meant as a tool to gage probability of various
events. Rather, we use inputs to know how likely the event is and then see the impact.
upvoted 1 times
  Romapretty 1 month ago

should be D. 7.5.1
upvoted 4 times
As climate change poses new financial risks to a central bank’s monetary policy operations, the bank decides to adapt operations with NGFS
guidelines. Because the central bank does not include climate change in supervision practices, the bank consults subject matter experts (SMEs)
to develop a proposal for central bank action on climate change. After completing the risk assessment, SMEs recommend the bank incorporate
microprudential and macroprudential measures to embed climate change into supervision practices.
Which action are SMEs likely to recommend?
A. Conduct climate stress tests with standardized policy scenarios and feedback loops as a microproduential measure.
B. Increase internal resources and establish an external review process for climate risk integration as a macroprudential measure.
C. Adhere to disclosure best practice when integrating climate risk by following TCFD disclosure recommendations as a microprudential
measure.
D. Implement the widely adopted macroprudential measure of a procyclical capital buffer to increase equity capital during periods of carbon-
intensive credit.
Correct Answer: B

Selected Answer: C
Microprudential Measures :
on disclosure, the Bank expects firms to consider implementing disclosures on climate risk beyond mandatory requirements, suggesting TCFD
rec-ommendations as a guideline.
upvoted 9 times
  Dunjeon_Master Most Recent  3 weeks, 4 days ago

C is correct
upvoted 1 times

Selected Answer: C
This was poorly worded. B is not macro
upvoted 1 times
  A2240 1 month ago

Review is the most important part of supervision
upvoted 1 times
The risk team for a multinational company, that operates and franchises hotel and timeshare properties, prepares talking points for an upcoming
business continuity plan meeting. A key area for discussion are the risks that can impact the company’s financial and reputational stability. The
team recommends the company conduct climate-related scenario analysis and provides examples of scenarios and their use.
Which of the following is correct for the team to include as part of the talking points?
A. Scenario analysis should use a limited set of assumptions and constraints to reduce the risk of generalized scenario results.
B. Scenario analysis allows a company to better understand its past performance by conducting a lookback analysis.
C. A company can internally develop its models and scenarios or make use of existing publicly available scenarios.
D. A company conducting scenario analysis should focus on either physical or transition risks to avoid inconsistent outcomes.
Correct Answer: C
A multinational footwear company prepares its annual GHG inventory. The company sustainability director organizes data according to the GHG
Protocol and prepares a set of recommended actions to lower company emissions.
Which action is the director most likely to recommend to reduce company Scope 3 emissions?
A. Switch to suppliers located closer to textile printing and product finishing facilities.
B. Replace company vehicles powered by petrol with electric vehicles and plug-in hybrids.
C. Retrofit all existing manufacturing facilities with energy efficient standards.
D. Upgrade air conditioning and other headquarters equipment to energy-efficiency models.
Correct Answer: A
At an international finance bank, a lack of staff clarity regarding sustainability, climate, and ESG definitions led to overlapping and inefficient
initiatives. To minimize inefficiencies, the sustainability department develops new terminology for use across the bank.
What should the department include in this new terminology?
A. Sustainability issues fall exclusively within climate change impacts.
B. ESG and sustainability risks are completely interchangeable.
C. ESG risks are broader than all sustainability risks.
D. Sustainability should include all governance and social risks.
Correct Answer: C

Selected Answer: D
Sustainability should include all governance and social risks.
upvoted 9 times
  sbrudersohn Most Recent  3 weeks, 6 days ago

Selected Answer: C
I'd choose C.
Why not D?
1. (2.1) "Investors and financial institutions, for their part, practice sustainability through the ESG policies.."
2. (2.2) "Sustainability...encompasses social and environmental awareness, and it seeks to ensure that economic activity does not harm either
society or the broader environment."
My comment: it refers to social and environmental instead of social and governance.
upvoted 2 times

As far as I understand it Sustainability is the broadest of all these categories. It is not right to say ESG risks are broader than all sustainability
risks. ESG is used mostly by the finance world, so I really don't think of it as that broad.
upvoted 2 times
The CRO at a commercial bank in China examines the negative impact of climate-related physical risk on clothing manufacturer cash flows that
subsequently lead to higher credit risk.
The CRO observes which event leading to increased credit risk from climate physical risk?
A. Decrease in production capacity due to higher labor absenteeism
B. Disruptions in the raw material supply due to climate adaptation
C. Rising costs of outdated manufacturing equipment write-offs
D. Higher costs of adaptation to stricter new low-carbon standards
Correct Answer: B

Answer B is wrongly phrased. Disruption "due to climate adaptation" is not a physical risk. More of a transition risk (efforts to reduce C02, self
induced).
Supply chain disruptions due to Chronic or acute climate events (...) would be physical risks.
upvoted 1 times

Adaptation is all physical risk, not transition risk.
upvoted 1 times
A retail company operates internationally, and increasingly incurs scrutiny for environmental and social impacts. In response, the company adopts
the SDGs. The company sustainability director begins this process by linking the SDGs to material concerns for the company.
Which strategy should the director suggest the company take to directly address one of the SDGs?
A. Disclose ESG factors to investors and stakeholders.
B. Maximize profits from green forest bonds.
C. Promote equitable access to water for surrounding communities.
D. Ensure the company follows through on stated CSR commitments.
Correct Answer: C
In response to a survey showing consumers consider sustainability a key factor in purchasing decisions, a group of cosmetics companies
announce a collaboration to develop an environmental impact assessment and sustainability framework for cosmetics products. The framework
enables customers to evaluate the environmental impact of products they purchase. The framework draft includes definitions of climate, green,
and sustainable finance.
Which of the following definitions is appropriate for the proposed framework?
A. Green finance refers exclusively to financial flows relating to climate change such as mitigation or adaptation.
B. Green finance refers to sustainable finance focused on environmental risks and opportunities.
C. Sustainable finance refers to public sector funding of projects relating to ESG and sustainable development.
D. Climate finance is a subset of green finance and broadly refers to any financial transaction that considers climate issues.
Correct Answer: B
A credit loan officer at a commercial bank reviews a loan application from a company engaged in coal-fired power generation. The loan officer
examines transition risks associated with the company’s business strategy.
What policy risk driver should the loan officer identify?
A. Prices of solar photovoltaic panels have declined since 2015.
B. Activists and advocacy organizations increasingly file lawsuits against fossil fuel-based power companies.
C. Lending to a coal-fired power plant will hurt the bank’s public image.
D. A government proposes legislation to mandate closure of all coal-fired power plants by 2035.
Correct Answer: D
A national regulator develops a new taxonomy for environmentally sustainable activities and policies. The taxonomy will provide clarity for
companies, capital markets, and policymakers on sustainable activities. During the development process, regulators survey taxonomies used
across various jurisdictions and decide to model after the EU Taxonomy.
Which characteristic of the EU Taxonomy will the regulator most likely implement in the new taxonomy?
A. Emphasize fossil-fuel activities that play a significant role in the region’s energy supply
B. Assess the impact of fund management on environmental and climate-related aspects
C. Set performance thresholds for economic activities that can be considered green
D. Guide sectoral coalitions of experts to broaden and promote the growth of a green finance ecosystem
Correct Answer: C
A West African energy company plans to expand beyond regional operations to markets throughout the continent. Executive leadership
determines integrating SDGs into operations can help the company appeal to new consumers and political decision makers. The company CSO
develops a strategy to promote the SDGs to external stakeholders.
What should the strategy include?
A. Calculation of the economic benefits of an SDG before applying a strategy.
B. Disclosure of the SDG alignment to investors to allow comparability among peers.
C. Quantification of each SDG target to measure progress.
D. Prioritization of SDGs that incorporate nature-based solutions.
Correct Answer: C
  StudyGuruESG Highly Voted  1 month, 3 weeks ago

How about (b) Disclosure of the SDG alignment to investors to allow comparability among peers.?
upvoted 7 times

Disclosing your own SDG alignment doesn't allow for comparability if other companies aren't also doing it
upvoted 2 times
A senior portfolio analyst at a global asset management firm performs a portfolio review to identify assets that may be affected by climate risk.
Preliminary findings show the firm heavily invests in food and beverage companies with high climate risk exposure due to extreme temperatures
and droughts. In a report to senior management, the analyst notes the firm can improve portfolio performance by examining physical risk, as the
firm currently focuses primarily on transition risk.
Which approach to examining physical risk at the portfolio level should the analyst recommend?
A. Best- and worst-in class of an index
B. Temperature score methodology
C. “Warming potential” measurement on portfolios
D. Downscaled global climate modeling
Correct Answer: B

Selected Answer: A
Temperature score methodology -> Company-Level Transition Risk
One relatively simple way of examining physical risk at portfolio level is to look at the best-and worst-in class of an index
upvoted 6 times
  SCRnow Most Recent  3 weeks, 6 days ago

Why are so many answers wrong on this page... A is correct. Answer B is clearly wrong. (ITR - Net Zero - Transition risk)
upvoted 1 times
Senior management at a global manufacturer of commercial flooring explores strategies to reduce capital costs and improve company valuation,
resulting in a comprehensive sustainability strategy. Management determines all future flooring products will be carbon neutral across their full
product life cycle. The risk team is tasked with updating the company ERM framework in accordance with COSO guidelines to include ESG and
climate-related risks. The team reviews and updates each of the ERM components.
What action should the team recommend the company take as part of the communication component of the ERM framework?
A. Determine which transmission channel of climate risk drivers is most relevant for the company.
B. Assess the relative importance of various climate risk and sustainability risk drivers.
C. Build climate risk into existing legal and compliance processes.
D. Establish processes to convey climate and sustainability risk exposure.
Correct Answer: D
The board of directors of a growing asset management firm recommends the firm expand its ERM framework to incorporate climate risks. In
response, the risk team references the COSO ERM framework for applying ESG-related risks to develop and propose a strategy to implement
climate risk into the various ERM components.
How will the risk team modify the existing strategy component of the company’s ERM framework?
A. Gather and use scores and physical and transition risk exposure data to conduct various analyses to determine if excess risk would exist in
an unfavorable climate scenario.
B. Evaluate the full business context on climate risk and understand how climate change affects the inputs, business activities, and outputs.
C. Factor in climate risk impacts when reassessing risks after considerable business changes.
D. Rank climate risks by likelihood of occurrence and severity to examine resulting outcomes and how the firm can mitigate these risks.
Correct Answer: D

Selected Answer: B
Strategy and Setting Objectives, Goals, and Targets :
An impor-tant prerequisite for strategic decisions is strategic landscape evaluation; this is especially the case in regard to climate issues.
Understanding the full business context on climate risk requires understanding the external environment and megatrends, such as the expected
physical, societal, and mac-roeconomic impacts of climate change.
upvoted 10 times
  sbrudersohn Most Recent  3 weeks, 5 days ago

Selected Answer: D
I agree with gooforme that answer B seems to be correct. However, I believe that answer D is also correct:
(6.6.3) Risk prioritization is especially important in an ERM context, as any large enterprise will be exposed to a multitude of risks, and it is
important to rank these in order of importance. Ranking methods include ranking by likelihood of occurrence, adaptability and complexity, or
severity. One way of ranking by severity is to examine what outcomes the risks affect, where risks affecting the fundamentals of business—
profits, revenues, and asset values—are ranked as more severe than risks that only affect more ancillary out-comes such as employee morale or
land use. Another way of prioritizing risks is to filter by the risks that the company can actually control.
upvoted 1 times

I would like to retract, since risk prioritization is part of the Performance component/area of the COSO ERM Framework. I fully agree with the
choice of B.
upvoted 1 times
A pension fund climate risk analyst evaluates the company portfolio under different climate scenarios. The analyst identifies technological
advancements and activities that must occur at a global scale to realize each scenario outcome.
Under a 1.5°C degree scenario, what development must occur?
A. Massive roll out of direct air capture technology.
B. The global levelized cost of energy for solar energy falls below USD 100 per MWh.
C. An international cap-and-trade system reduces overall GHG emissions.
D. Large afforestation projects lead to ecosystem restoration.
Correct Answer: B
  Karnitschnig Highly Voted  3 weeks, 6 days ago

Selected Answer: A
We have to go carbon negative to get to 1.5, A is the correct answer
upvoted 5 times
  Jalani1 Most Recent  3 weeks, 3 days ago

A says air capture not Carbon capture
upvoted 2 times
  Budhia 3 weeks, 6 days ago

A is the correct answer
upvoted 2 times
An industry association in Germany surveys members on business alignment with nationally determined contributions (NDCs). The association
members express concern about potential cascading legal repercussions or penalties if governments do not conform to Paris Agreement pledges.
An attorney at the association researches this issue and sends a memo to members.
The memo should state the Paris Agreement legally obliges signatories to take what action?
A. Provide financing to help developing countries achieve NDC goals.
B. Report on NDC progress every 5 years.
C. Penalize industries exceeding NDC emissions thresholds.
D. Revise NDC targets annually.
Correct Answer: B
A diversified industrial company embarks on a climate transition strategy to invest in a more fuel-efficient airline fleet. To finance the investment,
the CSO analyzes sustainable finance instruments and recommends instruments most suitable to issue.
Which of the following financial instruments should the CSO recommend and why?
A. A sustainability-linked bond for the purpose of financing a company-wide transition strategy.
B. A social bond as it offers more flexibility because there is no external review requirement.
C. A green bond because the use of proceeds can be clearly identified and tied to a particular project.
D. A sustainable bond so the company will benefit from favorable pricing from the terms linked to the corporate sustainability objective.
Correct Answer: C
A Central American country signs the Paris Agreement to align actions and policies to keep global temperature rise below 1.5°C. The country’s
environmental agency develops a nationally determined contribution plan that includes domestic, economy-wide, and sector-specific policies. The
power generation sector is most comprehensively covered by the plan.
Which policy included in the plan targets the power generation sector?
A. Green/low carbon public procurement
B. Renewable portfolio standard
C. Emission trading scheme
D. Carbon tax
Correct Answer: B
A multinational food and beverage corporation has growing concerns that CO2 and other GHGs in the atmosphere have a negative effect on
agricultural productivity. The corporation is subject to higher costs and scarce availability for commodities necessary for its supply chain.
The corporation will disclose this scenario under which climate-related risk type?
A. Market
B. Resilience
C. Chronic
D. Resource efficiency
Correct Answer: B

Selected Answer: C
According to Garps practice exam, the answer should be C and there is no such thing as Resilience Risk
upvoted 2 times
  Bianca_Mene 4 weeks ago

Selected Answer: C
I think it should be Chronic - as the same question is Part of GARPs Practice exam.
upvoted 2 times
A recent sustainability report revealed the pension fund of a small European nation is heavily invested in sectors with poor sustainability records.
In response to pensioner and other stakeholder requests, the fund joins the PRI.
What strategy must the fund incorporate to comply with the PRI?
A. Divest from energy companies involved in fossil fuel extraction.
B. Request disclosure from investee firms on ESG issues.
C. Standardize reporting frameworks across investment sectors.
D. Invest passively in companies with strong environmental performance.
Correct Answer: B
The CRO of an automobile manufacturer in North America prepares a keynote address on risks in the auto sector over the next decade. The CRO
highlights the primary technology risks facing its line of internal combustion engine (ICE) vehicles.
At approximately what point will many manufacturers of ICE vehicles experience a significant technology risk?
A. Renewable energy costs fall to USD 0.10 per megawatt hour
B. The cost of battery packs falls below USD 0.50 per kilowatt hour
C. Renewable energy costs fall to USD 35.00 per megawatt hour
D. The cost of battery packs falls below USD 100.00 per kilowatt hour
Correct Answer: D
A public policy think tank releases a report on global decarbonization pathways. The report describes the relative contribution of each GHG to
modern climate change and recommends focusing global efforts on CO2 reduction.
Why would the think tank make this recommendation?
A. CO2 atmospheric concentrations have increased by approximately 1 part per billion.
B. CO2 atmospheric concentrations have increased by approximately 100 parts per billion.
C. CO2 is responsible for approximately a 2.25 w/m2 increase in radiative forcing.
D. CO2 is responsible for approximately a 1.00 w/m2 increase in radiative forcing.
Correct Answer: C
An investment management firm signs a net zero asset management initiative. An analyst engages with client companies to encourage adoption
of targets that align with Paris Agreement goals. The analyst provides clients with a guide explaining the principles and protocols unique to the
Paris Agreement.
How will the analyst most likely describe the feature that distinguishes the Paris Agreement?
A. A framework that recognizes many stakeholders, from subnational actors to private-sector businesses and financial institutions, can help
contribute to climate goals
B. An emissions reduction mechanism that allows Annex 1 countries that make deeper emissions cuts to sell surplus emissions allowances to
other Annex 1 countries
C. A structure that legally binds signed parties to develop national climate policy plans that are reviewed and approved annually by the UN
D. A clean development mechanism that provides a way for emissions cuts to be spread to developing economies
Correct Answer: C

Selected Answer: A
Paris Agreement is not legally binded
upvoted 1 times

Selected Answer: A
The reviews are every 5 years.
upvoted 2 times

Selected Answer: A
In addition, the framework around the Paris Agreement explicitly recognized for the first time that many kinds of stakeholders, ranging from
subnational actors such as cities and regions to private-sector businesses and financial insti-tutions, could help to contribute to climate goals.
upvoted 3 times
A large real estate investment firm increases resources to understand transition and physical risks as it expands into markets with climate
regulations and increasing flooding events. Senior leadership requires the risk team train all business units in understanding how both climate
risks can impact operations.
During this process, how should the risk team define commonalities between both risks?
A. Each risk type can lead to stranded assets of investee companies.
B. Renewable energy investment returns will likely increase as each risk type grows.
C. The timing of impacts from each risk type will follow similar trajectories.
D. The majority of impacts from each risk type will manifest after 2050.
Correct Answer: D
  SustainAble 3 weeks, 6 days ago

correct is D as it says "the majority".
A cannot be for sure as to become stranded assets require exposure and vulnerability assessment
upvoted 2 times

Selected Answer: A
A is a better answer. D is vague and not necessarily true.
upvoted 1 times

Selected Answer: A
Use of scenario analysis for physical risks is significantly different from transition risk scenario planning in multiple ways.
However, a second important difference is that, because the climate system responds on a lag, physical impacts until about 2050 are largely
“baked in” by current emissions, so emissions trajectories do not matter on the timescale of the next few decades, which is what the majority of
policymakers, firms, and investors limit themselves to (Four Twenty Seven, 2019).
upvoted 2 times
A private equity fund invests in infrastructure development and agro-industrial projects. The fund hires a team of climate risk consultants to
advise on investment structure and the potential climate risks to the fund. The team recommends data types and analytical tools to evaluate
physical and transition risk impact at the company level.
How should the company evaluate company-level physical risk?
A. Calculate CVaR to offer quantitative estimates of expected financial losses or gains from climate risks and opportunities.
B. Develop company scores that combine proprietary methodologies with downscaled climate model data.
C. Measure the degree of corporate alignment to opt-in initiatives like the Transition Pathway Initiative’s Science-Based Targets.
D. Categorize carbon emissions as Scope 1, 2, or 3, and disclose corporate carbon footprints to data providers.
Correct Answer: B
A European bank considers investing in an offshore wind farm project. A bank ESG analyst assists in the origination and execution of green and
sustainable finance transactions to finance the project. The analyst recommends a loan to finance the project by gathering related materials on
sustainability-linked loans (SLLs), green loans, and corresponding market trends.
Which of the following loans is the analyst likely to recommend?
A. Green loan because in contrast to SLLs, green loans are rapidly being adopted by a variety of sectors and tied to numerous KPIs.
B. Green loan because it offers greater flexibility of use than SLLs as green loans do not have loan usage reporting requirements.
C. SLL because the total volume of SLLs exceeded that of green loans over the past 5 years.
D. SLL because SLL issuance is highly concentrated in renewable energy projects and the power generation sector.
Correct Answer: D
An environmental agency for a southeast Asian nation increases funding to study historic climate change and its impacts. The agency funds a
proposal for a scientific subject matter expert to conduct a large-scale study of the nation’s tree rings.
What information will this study most likely reveal?
A. Temperature anomalies up to 1°C
B. Frequency of climate tipping points
C. Temperature anomalies up to 10°C
D. Frequency of global ice ages
Correct Answer: A
The Commissioners of Insurance for a state in the western United States recommends all insurers now report annually on climate change, using
TCFD guidance.
Which of the following sectors do the commissioners correctly identify as encompassing the full scope of the TCFD recommendations?
A. Asset managers and owners, endowments, foundations, and additional financial and non-financial organizations
B. Asset managers and owners, endowments, foundations, and additional financial sector representatives
C. Institutional Investors Group-based benchmarking and GRI-derived data on climate change
D. Energy, transportation, materials and buildings, agriculture, land and forestry companies
Correct Answer: A
A prominent housing developer plans construction of a small low-carbon-emitting city in an equatorial nation. The developer plans to maximize
renewable energy use and estimates daily city summer solar energy generation capacity and load (total electricity demand), in megawatts (MW):
The developer estimates the following for capacity and load:

At 14:00 solar generation is highest at 720 MW
At 20:00 solar generation decreases to 0 MW
At 20:00 load is highest at 980 MW
At 4:00 load is lowest at 380 MW
How should the developer meet additional energy demand while achieving the lowest-carbon-emission goal option?
A. Increase solar capacity by 800 MW and install 200 MW of battery storage.
B. Install 750 MW of natural gas energy generation with 250 MW of energy efficiency measures.
C. Install 750 MW of coal energy generation with an additional 250 MW of intermittent renewable energy.
D. Increase solar capacity by 200 MW and install 800 MW of wind energy.
Correct Answer: D

Selected Answer: A
Correct answer is A.
upvoted 1 times

Selected Answer: A
Wind is intermittent too, not a good fix for the problem. And the numbers don't make sense. Batteries do for this case. Poor question
upvoted 1 times
A large country joins the Paris Agreement and directs the national environmental department to disseminate new policies and goals to relevant
federal agencies. Most agencies are familiar with past climate agreement principles and protocols but not those of the Paris Agreement.
The environmental department should educate federal agencies on what feature of the Paris Agreement?
A. Differentiated mitigation responsibilities according to national capabilities
B. Voluntary national climate targets updated on a regular basis
C. Investment in clean energy projects in exchange for emissions credits
D. Strategies for developing countries to advance mitigation plans
Correct Answer: B
A financial institution prepares to issue a sustainability-linked bond. As part of the preparations, the institution:
Develops green lending products, which account for 5% of its overall portfolio
Monitors energy usage of operations
Assembles a gender-balanced board
The institution’s sustainability department creates sustainability targets to achieve by 2025. Which new target best aligns with the Sustainability-
Linked Loan Principles?
A. A 40% reduction in total financed emissions
B. A significant reduction of GHG emissions from its operations
C. A substantial increase in green lending
D. A board of directors comprised of at least 50% women
Correct Answer: A
An alliance of electricity power producers examines a proposed cap-and-trade regulation that would affect most members. The alliance lobbies
lawmakers to strengthen banking and borrowing provisions in the proposed regulation, allowing increased flexibility for the sector to comply with
emissions limits.
What component of climate risk is the alliance directly attempting to influence?
A. Exposure
B. Hazards
C. Vulnerability
D. Drivers
Correct Answer: A
An international report on SDG progress identifies a large south Asian nation as not on track to meet most SDGs. Specifically, the nation’s
reduction of infant mortality and adoption of clean energy lag behind regional peers. In response, a government environmental minister creates a
memorandum outlining steps the nation can take to advance the 2030 Agenda goals. The office distributes the memorandum to other government
agencies.
How will the memorandum describe the 2030 Agenda goals?
A. Governments must update their progress on the goals every five years.
B. Progress on any goal is dependent on the advancement of the previous goal.
C. A project intended to advance a specific goal can help advance another goal.
D. Each goal sets a quantitative threshold to demonstrate progress.
Correct Answer: D
Senior management of a sportswear manufacturer will issue a bond to optimize company capital structure, while providing investors with an
opportunity to contribute to positive transformation of the fashion industry. Management prefers a bond with a high rate of issuance, and the
company sustainability team researches various green and sustainable finance instruments and issuance information over the past 5 years. The
team recommends a bond that globally posted the highest growth in issuance between 2019 and 2020.
Which bond did the team recommend?
A. Climate bond
B. Green bond
C. Sustainability bond
D. Social bond
Correct Answer: B
A climate resilience consultant prepares an overview for a regional agency client. The overview summarizes climate policies that significantly
reduce emissions. The client expresses a strong preference for a policy that limits emissions and offers flexibility in participant permits.
What policy should the consultant recommend to the client?
A. Feed-in tariffs
B. Fuel efficiency standards
C. Carbon tax
D. Cap-and-trade scheme
Correct Answer: D
A bank assesses lending portfolio alignment with various climate change scenarios. To assist in this process, the risk team applies the Paris
Agreement Capital Transition Assessment (PACTA) tool to examine transition risk for power generation, automotive, and steel sectors. The team
examines different PACTA metrics for each sector based on data availability and sectoral profile.
For sectors with no clear zero-carbon pathway, what metric will PACTA employ?
A. Production volume trajectory
B. Carbon allocation credit
C. Emission intensity
D. Technology and fuel mix
Correct Answer: C
After launching new large-scale sites for engine testing, a global automaker prepares a GHG inventory report according to the GHG Protocol. An
analyst on the sustainability team gathers data for the assessment. The analyst identifies emissions from production processes, previously
deemed irrelevant at the corporate level, now constitute over 25% of company aggregated GHG emissions across plant sites.
Which GHG Protocol principle did the company analyst follow?
A. Consistency
B. Accuracy
C. Transparency
D. Completeness
Correct Answer: D
A global investment bank expands its risk department to include climate risk assessment. Senior management directs the department to
implement approaches for evaluating how climate change affects traditional risk types. A risk manager recommends risk metrics for key risk
types that measure physical and transition risk impacts.
To measure credit risk, which metric should the analyst recommend?
A. Level of company preparedness
B. Bid-ask spread
C. Loan-to-deposit ratio
D. Loss given default
Correct Answer: A

Selected Answer: D
Level of preparedness is for operational risk.
LGD is for credit risk
upvoted 2 times
  Bianca_Mene 1 month ago

Credit Risk Metrics —>LGD
upvoted 3 times

Selected Answer: D
Operational risk -> level of company preparedness
Credit risk -> Loss given default (LGD)
upvoted 4 times
An international agrochemical company performs climate scenario analysis to include in TCFD disclosures. The risk department hires an analyst
with experience in physical risk scenario analysis.
What scenario analysis action will the analyst most likely recommend to evaluate physical climate risk?
A. Use a sector benchmark to understand the company wildfire risk for facility operations.
B. Use sectoral emissions trajectories up to 2050 to predict exposure to flooding events over the next 30 years.
C. Use historical data on hazard occurrences to identify potential supply chain vulnerabilities from changes in hurricane frequencies.
D. Use annual instead of decadal climate precipitation models to achieve the most accuracy in climate risk prediction.
Correct Answer: C
A global electronics manufacturer experiences severe flooding in one of its key locations. Company senior management will mitigate supply chain
risk and adhere to environmental standards by issuing a bond. The bond proceeds will simultaneously address floodwater contaminated by
industrial chemicals and assist communities experiencing deterioration of health conditions due to waterborne diseases.
Which bond is the company likely to issue?
A. Green bond
B. Sustainability-linked bond
C. Social bond
D. Sustainability bond
Correct Answer: A

Selected Answer: B
Sustainability-linked Bond is the most correct term.
upvoted 1 times

What is the difference between answers B and D? To me they are the same
upvoted 1 times

Selected Answer: D
Green bonds aren't a combo, but sust bonds are
upvoted 1 times

Selected Answer: D
Sustainability bonds are a combination of the two, in that they are meant to simultaneously address both environmen-tal and social objectives
upvoted 4 times
A technology company expands its sustainable offerings and develops a flight booking application that allows customers to offset a flight’s
carbon emissions. An analyst at the company researches climate agreements to inform the structure of the offsetting program.
How does the analyst describe the achievements and shortcomings of the agreements?
A. A shortcoming of COP21 (Paris) is that countries are legally obligated to annually submit nationally determined contributions (NDCs), and
most have kept NDCs at unchanged levels.
B. COP3 (Kyoto) resulted in differentiated national responsibilities wherein developing countries were not subject to emissions reduction
obligations, which disincentivized Annex 1 countries to take action.
C. The main achievement of COP15 (Copenhagen) was the creation of the IPCC, an influential scientific body that became the leading body in
guiding subsequent climate agreements.
D. Although COP1 (Berlin) ended with no binding treaty, it was the first COP to establish a goal that global warming remains below 2°C.
Correct Answer: A

Selected Answer: B
NDCs have changed.
upvoted 1 times

Selected Answer: B
A: the Paris Agreement makes use of the powerful tools of inclusion and peer pres-sure. Everyone must submit an NDC, and countries ramp up
ambitions when others do.
B: The fact that, in light of the notion of “common but dif-ferentiated responsibilities,” developing countries were not subject to any kind of
emissions reduction obligations (and indeed many had skyrocketing rates of emissions growth during this time) made even Annex 1 countries
less com-mitted.
upvoted 2 times
A prominent institutional investor forms a committee to support global investments to achieve net zero GHG emissions by 2050. To inform this
investment strategy, the committee relies on the IEA Net-Zero Scenario.
How should the committee proceed with investments to align with IEA milestones?
A. Invest in electric vehicles sufficiently to help make electric vehicles 30% of global vehicle sales by 2030.
B. Divest nuclear energy assets sufficiently to increase solar and wind energy shares of global energy production to 50% by 2050.
C. Invest in energy infrastructure sufficiently to ensure all new buildings are “zero-carbon-ready” by 2050.
D. Divest coal assets sufficiently to support a phase-out of all coal plants in advanced economies by 2030.
Correct Answer: D
A scientist at a large agricultural company develops an internal presentation that explains weather variation and long-term climate change. The
scientist presents global annual temperature anomalies (relative to a 1951-1980 average) throughout the last 20 years:
What natural forcing contributed to the temperature trend from 2014 to 2016?
A. El Niño
B. La Niña
C. Orbital fluctuations
D. Volcanic eruptions
Correct Answer: A
An economist at a large US state pension fund assesses transition risk and opportunities in response to pensioner requests that the fund increase
transparency on climate strategies. The economist uses IAMs to inform this analysis.
Which of the following will the economist most likely demonstrate by using IAMs?
A. Which SSP is a feasible emission trajectory for each RCP
B. The remaining carbon budget for each investment
C. Agreement among climate projections
D. Economically efficient paths to limit warming below 2°C
Correct Answer: D
An international chemical manufacturing company produces a variety of consumer and industrial goods and services. To progress company
alignment with the SDGs, the sustainability director suggests incorporating nature-based strategies.
Which strategy best represents a nature-based solution for the company?
A. Develop materials that enable vulnerable coastal communities to affordably install sea walls.
B. Support the growth of wetlands around some facilities to help absorb potential pollution runoff.
C. Purchase more fuel-efficient cars for the company vehicle fleet to reduce GHG emissions.
D. Reduce trace amounts of toxic chemicals in single-use plastic to protect sea life.
Correct Answer: B
The climate risk team at a global bank works on a sustainability and climate risk report for a forthcoming company strategy meeting. The meeting
will focus on bank goals to achieve net zero GHG emissions by 2050. Bank leaders will discuss potential risk exposures the bank may face, as well
as possible financial systemic effects.
Which of the following is an example of how systemic climate risk can translate into liquidity risk for the bank?
A. High level of deposit withdrawals from households and corporations after a hurricane severely affects a country.
B. Sea level rise causes coastal property prices to decrease, which leads to real estate losses for the bank.
C. Insurers significantly increase premiums due to climate-related risks and leave the bank without coverage, amplifying risks to financial
stability.
D. Sector-wide asset stranding for the financial sector increases due to climate pressures, which affects bank revenue and profits as cash flow
decreases.
Correct Answer: C

Selected Answer: A
A is a correct answer on liquidity risk
upvoted 1 times

A is the correct answer
upvoted 1 times

Selected Answer: A
A is liquidity,
C is underwriting
upvoted 2 times
A multi-industry consortium convenes risk managers from across the globe to discuss climate impacts on global trade and economic growth. A
climate modeler leads a discussion on macro-level physical changes in the Earth’s atmosphere and highlights two climatic trends that
demonstrate an inverse relationship in recent decades.
What two trends does the modeler highlight?
A. Atmospheric aerosol levels and forced variability events
B. Radiative forcing and Arctic sea ice extent
C. Norther and Southern hemisphere temperatures
D. Atmospheric water vapor and global temperature
Correct Answer: B
A financial institution in an East African nation decides to issue its first green bond in international debt capital markets. To encourage executive
board approval and funding for this action, the sustainability office describes the first successful sustainable debt issuance that helped launch the
global market in green bonds.
Which past bond issuance did the office describe?
A. A conscious sustainability bond issued in 2006 by the Canadian province of Alberta
B. A green bond issued in 2011 by a leading Australian mining company
C. A green bond issued in 2005 by a mid-tier German steel manufacturer
D. A climate awareness bond issued in 2007 by the European Investment Bank
Correct Answer: D
An international hotel chain reviews progress on sustainability goals in preparation for an Earth Day marketing campaign. A sustainability director
suggests the hotel highlight how its energy and food sustainability initiatives align with UN SDG targets.
Which of the following correctly describes an SDG target that the hotel could align with?
A. By 2030 double the rate of energy efficiency improvements.
B. By 2050 double the share of renewables in the energy mix.
C. By 2050 reduce per capita food waste by half.
D. By 2030 reduce GHG emissions to half of 2000 levels.
Correct Answer: D
  CecileC 2 weeks, 6 days ago

Selected Answer: A
It should be A - Target 7.3: By 2030, double the global rate of improvement in energy efficiency.
upvoted 1 times

Selected Answer: C
C is about food, D isn't. Also D isn't an SDG, they compare to 95 levels I believe
upvoted 1 times

C is not correct because SDGs are goals by 2030, not 2050.
upvoted 1 times
The CRO for a large agriculture company reviews reference scenarios as part of an annual climate scenario analysis exercise. The CRO creates a
transition risk matrix that compares four different scenarios - W, X, Y, Z. Scenarios are compared according to scale of emissions cuts and pace of
emission cuts. Scale is depicted as business as usual (BAU) to net-zero. Pace is depicted as orderly to disorderly. The CRO uses this matrix to
explain transition risk to the company’s executive members:
How should the CRO rank the reference scenarios from lowest level of transition risk to highest level of transition risk?
A. Lowest = Y; Highest = X
B. Lowest = W; Highest = Z
C. Lowest = Z; Highest = W
D. Lowest = X; Highest = Y
Correct Answer: D
  Riskr 3 weeks, 1 day ago

Selected Answer: A
Answer is A. See the question 28 in the GARP-provided exam book.
upvoted 1 times

Selected Answer: A
the highest transition risk comes from disorderly transition, so highest has to be x or z. If things are orderly and BAU, there's almost no transition
risk. So W is least risky.
D is just so clearly wrong

upvoted 1 times
  goodforme 1 month, 3 weeks ago

Selected Answer: A
Transition risk is higher when emissions are cut more drastically (net-zero emissions by 2050 scenario versus a current policies or business-as-
usual scenario), and when emissions cuts are more abrupt (disor-derly versus orderly transition).
upvoted 4 times
A technology company announces a goal of increasing recycling programs by 30% and reducing company carbon emissions by 50% by 2040. A
climate risk analyst at the company develops a sustainability framework and identifies ways to measure company-level transition and physical
risks.
Which of the following should the analyst use to measure company-level transition risk?
A. Corporate alignment scores
B. Carbon intensity calculations
C. ESG score comparisons
D. Facility-level location
Correct Answer: A
To achieve emissions reduction goals, a South American government considers policies other than carbon pricing to target carbon-intensive
industries more effectively. The government intends to promote renewable power generation by implementing subsidies.
Which action should the government take to support this subsidy policy?
A. Launch renewable portfolio standards
B. Create fuel efficiency standards
C. Mandate CO2 emissions standards
D. Establish feed-in tariffs
Correct Answer: A

Selected Answer: D
I think the correct answer is D.
upvoted 1 times

Selected Answer: D
D. Feed in tariffs are subsidies. RPS are not.
upvoted 2 times
A European bank surveyed its most prominent clients to assess interest in sustainability-linked loans (SLLs) and green loans. The survey came
after a recent study showed higher profitability rates of SLLs and green products than classical banking products. After positive feedback, the
bank decides to introduce SLLs and green loans. The bank’s sustainability loan officer writes a new loan product guideline for corporate clients
that explains SLLs and green loans.
How will the bank officer describe these loan types?
A. Green loans can be applied more broadly on the corporate loan market than SLLs since there are no predetermined performance targets for
SLLs.
B. SLLs require external review, while green loans require external review if the loan information is not publicly available.
C. SLLs incentivize borrowers through margins, while green loans focus on the purpose of the loan.
D. Market participants are unable to structure a loan to meet both the characteristics of a green loan and an SLL.
Correct Answer: C
A telecommunications corporation issues a green bond to finance energy efficiency improvements for the company’s office space worldwide. The
company’s risk management department commissions an independent advisory assessment of the bond to check bond alignment with
components of the Green Bond Principles.
What action does the corporation take to align the bond with the “process for project evaluation and selection” component of the Green Bond
Principles?
A. Submit legal documentation providing clear quantifiable environmental benefits of the project.
B. Establish an internal process for tracking and allocating funds from the proceeds of the bond.
C. Create an identification process for environmental and social risks related to energy efficiency improvements.
D. Make available an annual summary on the use of proceeds, stating the project’s progress.
Correct Answer: D

Selected Answer: C
Process for Project Evaluation and Selection:
the related eligibility criteria, including, if applicable, exclusion criteria or any other process applied to identify and manage potentially material
environmen-tal and social risks. [. . .]
upvoted 3 times
A sustainability analyst reports on the following metrics for a global healthcare company:
GHG emissions reductions -

Number of lives saved through pharmaceutical products
To conform with the triple bottom line concept, what additional indicator should the analyst include?
A. Alignment with SDGs
B. Board of director engagement
C. Annual revenue performance
D. Water management efficiency
Correct Answer: A

Selected Answer: C
They already have a social bottom line element, and an environmental bottom line metric. They need the traditional financial bottom line
upvoted 2 times

Selected Answer: C
Triple-bottom implies environmental, social and FINANCIAL performance
upvoted 3 times
Organizers of an upcoming UN Climate Change Conference prepare a document highlighting successes and failures of climate accords over the
last 20 years.
The document lists what success from the 2009 Copenhagen Accord?
A. Unconditional emissions reduction targets by Annex II parties
B. Binding short-term GHG emissions reduction commitments
C. Establishment of a uniform emissions reduction target baseline
D. Acceptance of a quantitative long-term global warming limit
Correct Answer: B

Selected Answer: D
D is the right answer
upvoted 1 times

Selected Answer: D
Copenhagen was known for putting a limit on long term global warming
upvoted 3 times

Selected Answer: C
For one example, the meeting in Copenhagen was the first COP to establish the aspirational goal that global warming be kept to below 2°C.
upvoted 1 times

"global warming be kept to below 2°C" is a goal, not a baseline. A baseline would be "reducing XX% from a certain year level". So the answer
should be D.
upvoted 1 times
  goodforme 3 weeks ago

D is correct answer.
upvoted 1 times
A risk consultant begins an engagement for a development agency. The engagement focuses on identifying policies that address climate change
impacts. The consultant drafts an action plan that incorporates a roadmap of effective climate policies to present to senior directors at a strategic
meeting. The plan includes an introductory summary of the backdrop and effectiveness of historical and current climate policies.
How should the consultant describe the context of climate policy evolution?
A. As global mean annual temperatures rose significantly in the 1980s, scientific consensus around human influence on climate solidified,
leading to the formation of the IPCC.
B. After the World Climate Summit, global climate policy legally required countries responsible for the greatest share of cumulative emissions
to cut back emissions the most.
C. Evidence from the past two decades has accumulated that warming levels will lead to tipping points, supporting an international consensus
and policies around a goal of limiting warming to 2.5°C.
D. The first attempts to create international climate policies and accords focused on emissions reductions occurred in the 1970s, as
anthropogenic GHG emissions were globally recognized as fact by scientists.
Correct Answer: D
  SustainAble 3 weeks, 5 days ago

D is correct.
Global temperatures rose significantly even before the 80's so A cannot be correct as others comment here
upvoted 2 times

Selected Answer: A
A is accurate, D is not
upvoted 1 times

Selected Answer: A
A: But in the 1980s, global mean annual temperatures started to rise significantly, and scientific con-sensus around the strong human influence
on climate solidi-fied, leading to the formation of the Intergovernmental Panel on Climate Change (IPCC) in 1988
D: There have been various attempts since the 1990s to agree on international climate policies, mainly regarding emissions
reductions, at a global level. The first global agreement on climate change was the formation of the United Nations Framework Convention on
Climate Change (UNFCCC) in 1992; the first accord on emissions reductions was the Kyoto Protocol of 1997;
upvoted 2 times
A team of climate risk specialists at a global non-profit research organization prepares a study on climate policy and achieving national climate
change mitigation targets. The study focuses on actors, non-state and subnational (NSA) participants, and actions that can be taken to impact
climate policy.
How should the team describe effective climate policy and climate change mitigation targets?
A. A hindrance to the effectiveness of regional policies is that ambitious climate policy cannot be made without the support of the federal
government.
B. Subnational commitments and actors can function as networks or advocacy efforts to combat climate change.
C. There has been an increasing trend in diverging public and private sector coalitions and consequent climate actions.
D. Full implementation of NSA commitments is expected to lower GHG emissions by close to 1.5%-2.0% more by 2030 than national pledges.
Correct Answer: D

Selected Answer: B
D is inaccurate, B is accurate
upvoted 1 times

Selected Answer: B
B: Some subnational efforts function more as networks and advocacy efforts. C40, a global coalition of cities dedicated to combating climate
change, founded by 18 cities in 2005 and now with 97 members, is a transnational example, and helped contribute to international pressure to
bring about the Paris Agreement.
D: It found that full imple-mentation of NSA commitments would lower emissions by 3.8–5.5% more by 2030 than national pledges in those ten
countries would do alone (Kuramochi et al., 2020).
upvoted 3 times
A sustainability analyst at a global energy company assesses trends in the electric power sector for the next 10 years. To inform strategy, the
analyst focuses on the interaction among climate risks, advancements in renewable energy, and stranded asset risk for fossil fuels.
According to the analyst, what trend will likely emerge during the next decade?
A. The global levelized cost of energy for renewables increases to compete with fossil fuel energy generation.
B. Solar and wind newbuilds require stronger subsidies to be competitive in most parts of the world.
C. The transportation sector faces technology risk if the trajectory of the learning curve for battery storage remains the same.
D. Power plants that replace natural gas with coal will reduce transition risks in the event of rising carbon prices.
Correct Answer: B

Selected Answer: C
The statement (C) highlights that if the learning curve for battery storage technology does not improve over the next decade, the transportation
sector could face technology risk. Battery storage advancements are essential for the widespread adoption of electric vehicles, which play a
significant role in reducing greenhouse gas emissions and dependence on fossil fuels.
Other options (A, B, and D) do not reflect the likely trends during the next decade:
A. The levelized cost of energy for renewables has been consistently decreasing, making them increasingly competitive with fossil fuel energy
generation.
B. Solar and wind costs have decreased substantially, and they are becoming competitive without subsidies in many parts of the world.
D. Replacing natural gas with coal would actually increase greenhouse gas emissions and transition risks, as coal is a more carbon-intensive
energy source. The trend in the power sector is moving towards cleaner energy sources, such as renewables and natural gas, which emit less
CO2 than coal.
upvoted 1 times

Selected Answer: C
B is flat out wrong. Solar and wind are doing great even without subsidies. C is right. This answer key was just crappy
upvoted 1 times

Question is not about transportation but power generation. Answer C is a trap. Correct one is B.
upvoted 1 times

B can't be correct because the question asks about the trends for next decade. Solar and wind have been competitive with fossil fuel in
many places and the trend will continue.
upvoted 1 times
A Southeast Asian national military plans infrastructure investments that incorporate climate risk considerations. Part of the planning process
includes climate scenario analysis. After considering several scenarios, the military assumes a future with increasing regional rivalry and conflict
among nations.
The military will rely on which global reference scenario to inform its scenario analysis?
A. RCP 2.6
B. SSP1
C. SSP3
D. RCP 1.9
Correct Answer: B

Selected Answer: C
Answer C- SSP3 -regional rivalry
upvoted 1 times

Selected Answer: C
SSP 3 is the regional rivalry scenario
upvoted 2 times

Selected Answer: C
SSP3- INVolves rivaly
upvoted 2 times

Selected Answer: C
SSP-1 sketches out a scenario of signifi-cant focus on sustainability;
SSP-3 involves regional rivalry between countries;
upvoted 4 times
To assess potential business implications of climate change, a large manufacturing company implements scenario analysis for the first time. The
company hires a consultant to help incorporate climate-related considerations into a model of the company’s potential business outcomes.
What useful scenario analysis information should the consultant make the company aware of?
A. Transition and physical climate scenarios assess historical vulnerabilities to climate change.
B. Physical scenarios portray a pathway of emissions to deliver a given limit to warming.
C. Transition and physical risk considerations are complementary in scenario analysis.
D. Physical scenarios include material consequences of new climate policies on short-term energy supplies.
Correct Answer: C
An EU juice producer heavily relies on Brazil’s supply of oranges to produce its top-selling orange juice brand. The producer anticipated steady
growth, but production decreased due to the rise in mean temperature in Brazil.
The climate-related risk of mean temperature rise in Brazil increases what indirect effect?
A. The chronic market risk of a temperature rise disrupts the supply chain for oranges, reversing the significant asset write-offs for the juice
producer.
B. The chronic physical risk of a temperature rise decreases the production of oranges and subsequently negatively impacts the profits of the
juice producer by reducing the production of the juice brand.
C. The acute reputational transition risk of a temperature rise decreases production due to health-related issues with workers in Brazil, leading
to reduced demand for the juice brand.
D. The acute physical risk of a temperature rise disrupts the supply chain for oranges, creating financial losses for the juice producer due to its
inability to honor its supply contracts.
Correct Answer: D -

Selected Answer: B
B is the best
upvoted 1 times

Selected Answer: B
B is the best. Temperature ise is chronic not acute.
upvoted 1 times
  Aziz09081 3 weeks, 4 days ago

B is best ans
upvoted 2 times

Selected Answer: B
Temperature rise is chronic, not acute, so D is out. B is best answer
upvoted 2 times

SCR Exam - With Answers

Uploaded by

Copyright:

Available Formats

You might also like

SCR Exam - With Answers

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

SCR Exam - With Answers

Uploaded by

Copyright:

Available Formats

- Expert Verified, Online, Free.

 Custom View Settings

  agarwalprakash 3 weeks, 6 days ago

  SCRnow 3 weeks, 6 days ago

  Allexa 1 month ago

Community vote distribution

  CecileC 3 weeks ago

  SolMak 3 weeks, 2 days ago

A. Sea level rises proportionally faster than GHG emissions.

B. Sea level rise lags GHG emissions.

C. Sea level rises in response to ocean acidification.

D. Sea level rise will cease once global emissions peak.

A. Process for project evaluation and selection

B. Combine SSPs with different RCPs to assess climate policy options.

C. Eventually replace SSPs with RCPs by integrating underlying data assumptions.

D. Use SSPs to provide alternative emissions pathways to RCPs.

  CecileC 3 weeks ago

  Aziz09081 3 weeks, 3 days ago

  Budhia 3 weeks, 6 days ago

A. Carbon dioxide emissions; labor conditions of agricultural workers; board diversity

C. Water use efficiency; employee retention and satisfaction; community engagement

D. Energy use; GHG intensity reduction; executive leadership compensation

  Chanelle 2 weeks, 6 days ago

  Dunjeon_Master 3 weeks, 4 days ago

  Karnitschnig 3 weeks, 6 days ago

Question #10 Topic 1

B. Oil & Gas

  sbrudersohn 3 weeks, 1 day ago

  SCRnow 3 weeks, 6 days ago

  SCRnow 3 weeks, 6 days ago

  Karnitschnig 3 weeks, 6 days ago

B. Following a high carbon tax, a company strands high-emissions assets.

D. Flooding damages an information technology company data center.

  CecileC 3 weeks ago

  Dunjeon_Master 3 weeks, 4 days ago

  SCR_Fighter 3 weeks, 2 days ago

  sbrudersohn 3 weeks, 1 day ago

  goodforme Highly Voted  2 months, 1 week ago

  sbrudersohn Most Recent  3 weeks, 1 day ago

  Riskr 3 weeks, 3 days ago

  SCR23 1 month, 2 weeks ago

  Riskr 3 weeks, 3 days ago

  Dunjeon_Master 3 weeks, 4 days ago

  SCRnow 3 weeks, 6 days ago

  Samastiti 1 month, 3 weeks ago

  2shig 3 weeks, 5 days ago

  CecileC 3 weeks ago

  sbrudersohn 3 weeks, 6 days ago

  SCRnow 3 weeks, 6 days ago

  Karnitschnig 3 weeks, 6 days ago

  goodforme 2 months, 1 week ago

A. Statistical analysis of historic drought occurrences

B. Future projections of global emissions

C. Cross-hatching that indicates climate model agreement

D. Community exposure to increased flooding events

Question #18 Topic 1

D. Corporate self-regulation toward increasing government responsibility for social issues

  Dunjeon_Master 3 weeks, 4 days ago