CFA Institute Sustainable-Investing Exam With Confidence Using Practice Dumps

The European Union's Sustainable Finance Disclosure Regulation (SFDR) requires that the carbon intensity of a portfolio is measured by accounting for Scope 1, Scope 2, and Scope 3 emissions. This comprehensive approach ensures that both direct and indirect emissions across the entire value chain of the companies are considered, providing a more complete picture of the carbon footprint associated with investments​​​​.

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A coal power plant forced to close due to carbon regulationsis astranded asset, as it loses economic value due toregulatory, environmental, or market changes.

A tech company losing market share (B) is a business risk, not asset stranding.

Short-term stock price declines (C) are normal market fluctuations.

ICGN Model Mandate:

The ICGN Model Mandate is designed to align the interests of asset owners and asset managers with a focus on long-term value creation rather than short-term performance metrics.

According to the CFA Institute, the ICGN Model Mandate sets out principles and practices that encourage long-term investment strategies and de-emphasize the significance of short-term performance.

Focus on Long-Term Performance:

The Model Mandate highlights that evaluating investment managers based on short-term performance can lead to suboptimal investment decisions and may encourage behaviors that are not aligned with the long-term interests of asset owners.

The CFA Institute notes that the ICGN Model Mandate promotes a longer-term perspective in investment evaluation, which is crucial for sustainable value creation.

Investment Principles:

The ICGN Model Mandate includes guidelines for performance assessment, stating that short-term underperformance should not be a primary concern if the investment process and long-term strategy are sound.

The Brunel Asset Management Accord echoes this sentiment by emphasizing that short-term performance will be of limited significance in evaluating the manager, aligning with the principles set forth by the ICGN.

Implementation:

Asset owners are encouraged to adopt the ICGN Model Mandate to ensure that their investment mandates and manager evaluations reflect a commitment to long-term performance and sustainable investing.

The CFA Institute suggests that integrating these principles into investment mandates helps mitigate the risks associated with short-termism and supports the alignment of investment strategies with long-term goals.