Professional Development Month 2023: ESG quiz

1. ESG considerations
There are multiple areas to consider in relation to ESG. Below are some examples. Which of the following fall under the S of ESG?

a) climate change mitigation
b) inclusiveness
c) biodiversity preservation
d) corporate governance in private institutions
e) investment in human capital
f) investment in communities
g) circular economy
h) sovereign policymaking

2. Climate Financial Risk Forum (CFRF)
The Bank of England's CFRF published its third round of guides to help the financial sector develop its approach to addressing climate-related financial risks and opportunities. Which of the following areas do the guides focus on?

a) climate data; engagement; scenario analysis, data and metrics
b) the transition to net zero; stewardship; and tracking progress
c) the transition to net zero; scenario analysis; and climate disclosure, data and metrics
d) engagement; stewardship; and climate disclosure, data and metrics
e) the transition to net zero; scenario analysis; and tracking progress

3. Carbon border tax
As part of its ‘green day’ proposals, the UK government is consulting on a carbon border tax. Potential impacts, alongside opportunities for carbon offset projects and an enhanced focus on ESG factors, could include which of the following:

Choose all that apply.

a) increase cost of imports
b) changes to supply chains
c) reduced import costs
d) additional compliance requirements
e) cheaper imports from countries with less strict climate policies
f) additional reporting requirements

4. Trade finance
Demica recently carried out a survey on ESG in the trade finance industry. Which three of the following were findings from the report?

a) 85% say that they expect to prioritise ESG in the next 12 months
b) 14% say they are focusing on offering favourable rates based on ESG scoring criteria in order to drive ESG in trade finance transactions
c) the number of respondents using ESG rating services when evaluating or structuring transactions is less than a quarter (23%)
d) The top challenge for corporates when setting up securitisation transactions is achieving off-balance sheet treatment for the transaction (91%)
e) Understanding the possible products that are available was thought to be a challenge (30%)
f) 86% of respondents think the changes will impact the demand for payables finance and lead to fewer payables transactions

5. ESG ratings
Which of the following types of ESG related ratings are currently available?

a) Credit ratings with ESG relevance scores
b) ESG risk ratings
c) Second-party opinions
d) ESG impact ratings

6. The International Organisation of Securities Commissions’ (IOSCO)
The IOSCO issued its Report on International Work to Develop a Global Assurance Framework for Sustainability-related Corporate Reporting. Which four of the below observations were included in the findings:

a) Larger issuers are more likely to seek assurance on their sustainability-related reporting
b) A requirement has been introduced for large private companies to disclose transition plans
c) Independent assurance may be provided by either audit firm or non-audit firm assurance providers
d) Investors see consistent and comparable application of assurance and ethics standards for sustainability-related information as key to supporting high-quality assurance engagements
The IAASB is developing an overarching standard for assurance on sustainability-related reporting – the International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements
f) Most banks have now improved their public disclosures to address climate and environmental risks

7. If you would like to be entered into the prize draw please provide your name and email address below:

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