CFA Institute Exam ESG-Investing Topic 6 Question 8 Discussion

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

Question #: 8
Topic #: 6

[All ESG-Investing Questions]

A common characteristic of the EU Paris-Aligned Benchmarks and the EU Climate Transition Benchmarks is that they both:

Apermit only green investments.

Bpermit fossil fuel investments as part of a transition process.

Crequire a reduction in carbon emissions intensity in the starting year.

Show Suggested Answer

Suggested Answer: C

Both the EU Paris-Aligned Benchmarks and the EU Climate Transition Benchmarks require an initial reduction in carbon emissions intensity in the starting year, to ensure alignment with climate goals and the Paris Agreement. (ESGTextBook[PallasCatFin], Chapter 3, Page 153)

by Rikki at Jan 15, 2025, 08:30 PM

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Cherrie

4 months ago

I'm feeling a strong C vibe. Anything less than immediate emissions reductions is just greenwashing if you ask me.

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Kimbery

4 months ago

Ha! As if the EU would ever permit only green investments. B is the way to go, folks. Gotta keep those oil barons happy, am I right?

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Tenesha

2 months ago

Let's hope the EU finds a balance between the two for a successful transition.

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Abraham

3 months ago

True, but a gradual transition might be more feasible in the short term.

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Viki

3 months ago

But shouldn't we be moving towards greener investments for a sustainable future?

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Elouise

3 months ago

I agree, B seems more realistic. Can't cut off fossil fuels cold turkey.

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Alexis

4 months ago

I'm not sure, but I'm leaning towards B. Fossil fuels are still a reality, and a managed transition is better than a complete ban.

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Eliz

4 months ago

Hmm, I'm going with C. Reducing carbon emissions intensity right away is crucial for these benchmarks to have any real impact on climate change.

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Timothy

4 months ago

B seems like the logical choice here. Fossil fuel investments are a necessary part of the transition process towards greener alternatives.

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Edward

2 months ago

Exactly, it's all about finding the right balance between sustainability and practicality.

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Ramonita

2 months ago

That's a valid point, but allowing some fossil fuel investments can help industries make the shift gradually.

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Lonny

3 months ago

But wouldn't it be better to focus only on green investments to speed up the transition process?

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Sharan

3 months ago

I agree, B is the correct choice. We can't completely eliminate fossil fuel investments overnight.

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Lenny

4 months ago

But wouldn't allowing fossil fuel investments contradict the goal of reducing carbon emissions?

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Aretha

4 months ago

I disagree, I believe the answer is A) permit only green investments.

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Hoa

4 months ago

I think C is the correct answer. The benchmarks require a reduction in carbon emissions intensity from the start to support the transition to a low-carbon economy.

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Corrinne

4 months ago

A: That's true, it shows a commitment to transitioning towards a more sustainable and environmentally friendly investment approach.

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Myong

4 months ago

B: I agree, it makes sense to have a requirement for reducing carbon emissions intensity in the starting year for both EU Paris-Aligned Benchmarks and EU Climate Transition Benchmarks.

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Willetta

4 months ago

A: I think C is the correct answer. The benchmarks require a reduction in carbon emissions intensity from the start to support the transition to a low-carbon economy.

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Lenny

5 months ago

I think the answer is B) permit fossil fuel investments as part of a transition process.

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