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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 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?

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?

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 product manager at a regional bank analyzes customer feedback and sustainability trends to enhance bank offerings. After completing the review, the manager recommends a new consumer-facing product to attract sustainability-conscious customers. Which product does the manager most likely recommend?

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?

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 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?

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 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?