Question 1

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?

Options :

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

Answer: D

Question 2

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?

Options :

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.

Answer: B

Question 3

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?

Options :

A : Pursuit

B : Sharing

C : Reduction

D : Acceptance

Answer: C

Question 4

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?

Options :

A : Pursuit

B : Sharing

C : Reduction

D : Acceptance

Answer: C

Question 5

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?

Options :

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.

Answer: C

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