CFA Institute Exam ESG-Investing Topic 3 Question 13 Discussion

Actual exam question for CFA Institute's ESG-Investing exam

Question #: 13
Topic #: 3

Which of the following is one of the four phases of activities contained by the LEAP assessment framework developed by the Taskforce on Nature-related Financial Disclosures (TNFD)?

AMinimize their interface with nature

BMaximize their dependence and impact on nature

CEvaluate material risks and opportunities for their operations

Show Suggested Answer

Suggested Answer: C

The LEAP assessment framework developed by the Taskforce on Nature-related Financial Disclosures (TNFD) consists of four phases: Locate, Evaluate, Assess, and Prepare. This framework is designed to help organizations understand and address nature-related risks and opportunities.

Locate: This phase involves identifying and mapping the interface of the organization with nature. It includes understanding the dependencies and impacts of the organization's activities on nature.

Evaluate: In this phase, organizations evaluate the material risks and opportunities that arise from their interactions with nature. This includes assessing how these risks and opportunities could affect their operations, value chains, and financial performance.

Assess: Organizations conduct detailed assessments of the material risks and opportunities identified in the Evaluate phase. This involves deeper analysis to quantify and prioritize the risks and opportunities.

Prepare: The final phase involves preparing strategic responses to mitigate risks and capitalize on opportunities. Organizations develop plans and actions to manage nature-related risks and enhance resilience.

Option C, 'Evaluate material risks and opportunities for their operations,' aligns with the Evaluate phase of the LEAP framework, making it the correct answer.

by Pearlie at Apr 04, 2025, 09:51 AM

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Ayesha

2 months ago

I'm torn between B and C, but I'll have to go with C. Evaluating risks and opportunities is the name of the game when it comes to the TNFD. Though I do enjoy the idea of maximizing our dependence on nature - it's like a reverse Ponzi scheme, but with trees!

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Tran

1 months ago

User 3: I see the appeal of maximizing dependence on nature, but evaluating risks is key for sustainability.

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Lai

1 months ago

User 2: Lai is right, it's all about managing those material risks and opportunities.

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Ronnie

1 months ago

User 1: I agree, evaluating risks and opportunities is crucial for operations.

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Sophia

3 months ago

Option C is the way to go. I mean, who wouldn't want to maximize their dependence on nature? That's just good business, right? Nah, just kidding. C is the clear winner here.

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Franklyn

2 months ago

User 4: It's all about being proactive and sustainable in the long run.

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Teresita

2 months ago

User 3: Agreed, it's important to assess how nature-related factors can impact operations.

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Carlene

2 months ago

User 2: Definitely, understanding the risks and opportunities is crucial for any business.

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Elly

2 months ago

User 1: C) Evaluate material risks and opportunities for their operations

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Rossana

3 months ago

Definitely going with C. Minimizing or maximizing our impact on nature doesn't sound like what the TNFD framework is about. It's all about evaluating the material stuff.

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Bettina

2 months ago

Yeah, minimizing or maximizing impact doesn't seem to fit the framework. C is the way to go.

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Pamella

2 months ago

I agree, C is the right choice. It's all about evaluating risks and opportunities.

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Dyan

3 months ago

I think option C is the correct answer. The TNFD framework is all about evaluating nature-related risks and opportunities, so that makes the most sense.

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Samuel

1 months ago

Option C - Evaluate material risks and opportunities for their operations - seems like the most relevant choice.

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Latricia

1 months ago

That's right, it's important for companies to assess how their operations impact nature.

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Gaynell

1 months ago

I agree, the TNFD framework is focused on evaluating material risks and opportunities.

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Lazaro

1 months ago

I think option C is the correct answer.

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Maybelle

1 months ago

Yes, evaluating material risks and opportunities is a key aspect of the LEAP assessment framework.

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Haydee

2 months ago

Definitely, option C aligns with the purpose of the TNFD framework.

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Annamae

2 months ago

I think so too, it's all about evaluating risks and opportunities.

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Marci

2 months ago

I agree, option C is the most logical choice.

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Rosita

3 months ago

I'm not sure, but I think it's important for companies to consider their impact on nature, so maybe B) Maximize their dependence and impact on nature could also be a valid answer.

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Janella

3 months ago

I agree with Alex, because it makes sense for companies to assess the risks and opportunities related to nature in their operations.

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Alex

4 months ago

I think the answer is C) Evaluate material risks and opportunities for their operations.

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