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CFA Institute ESG-Investing Exam - Topic 5 Question 28 Discussion

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

Question #: 28
Topic #: 5

[All ESG-Investing Questions]

Exclusionary screening:

Areduces portfolio tracking error and active share.

Bis the oldest and simplest approach within responsible investment.

Cemploys a given ESG rating methodology to identify companies with better ESG performance relative to its industry peers.

Show Suggested Answer

Suggested Answer: B

by Elroy at May 16, 2026, 01:30 AM

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Lera

2 days ago

I think exclusionary screening might reduce active share, but I need to double-check how that relates to tracking error.

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Angelica

7 days ago

I feel like option C sounds familiar because we talked about ESG ratings, but I'm not confident if that's the right choice here.

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Nydia

12 days ago

I remember discussing how exclusionary screening is one of the oldest methods in responsible investing, but I can't recall the details.

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Clay

2 months ago

I think exclusionary screening is more about avoiding certain companies, but I'm not sure how it affects tracking error.

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