Sustainable Investing Certificate Sustainable-Investing Passing Score

PRI’s minimum requirements state that each signatory must haveformal senior-level oversight and accountability mechanismsin place for responsible investment policies and their implementation. This requirement ensures governance structures are aligned with ESG commitments.

Net zero portfolio construction involves multiple challenges, especially regarding carbon accounting and Scope 3 emissions (indirect emissions from value chains). The CFA’s sustainable investing guidance notes there isno universally accepted standardfor carbon risk netting (disproving option A) andno consensuson how to treat derivatives or short positions (ruling out option B). However, if investorsexclude Scope 3 emissions(which are significant for heavy industry and energy sectors), portfolios oftentilt heavily toward lower-carbon, technology-heavy sectors. Thus, technology sector allocations are typicallyoverweightas a result of this exclusion, making option C correct.

The ICGN Model Mandate emphasizes thatmaterial governance events—such as regulatory investigations and changes to investment approach—require early reportingto clients. However,short-term underperformanceis generally considerednormal portfolio variabilityanddoes not trigger early reporting obligationsunder ICGN guidance unless it significantly alters the investment thesis.

AnESG contingent assetis a potential benefit that emerges from a company’s ESG-related activities. In the health care sector, using data analytics to develop affordable health solutions for governments can be seen asunlocking new revenue opportunitiesor strengthening market position—making it an ESG contingent asset. In contrast, acting as a data custodian (option A) is more of aresponsibility(risk) than an asset, and lagging recruiting strategies (option B) represent ESG weaknesses.