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GARP Sustainability and Climate Risk Sample Questions (Q87-Q92):
NEW QUESTION # 87
In response to consumer demand for eco-friendly products, a global personal care company develops a net- zero transition plan. The company sustainability team recommends an appropriate carbon accounting method for the plan. Which of the following country-level emission accounting methods is most likely recommended and why?
- A. Consumption-based accounting to calculate the carbon footprint of the entire product life cycle
- B. Consumption-based accounting to specifically measure emissions from supply chain imports
- C. Production-based accounting to highlight GHG emission reduction in operations
- D. Production-based accounting to measure GHG emissions regardless of location
Answer: A
NEW QUESTION # 88
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
Answer: A
NEW QUESTION # 89
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. Acceptance of a quantitative long-term global warming limit
- B. Establishment of a uniform emissions reduction target baseline
- C. Unconditional emissions reduction targets by Annex II parties
- D. Binding short-term GHG emissions reduction commitments
Answer: A
NEW QUESTION # 90
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. ESG risks are broader than all sustainability risks.
- B. Sustainability issues fall exclusively within climate change impacts.
- C. Sustainability should include all governance and social risks.
- D. ESG and sustainability risks are completely interchangeable.
Answer: C
NEW QUESTION # 91
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 mining company that extracts lithium for lithium-ion batteries benefits from higher commodity prices, which increases revenue and profits.
- B. 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.
- 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.
Answer: D
NEW QUESTION # 92
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