Sustainability and Climate Risk v1.0 (SCR)

A scientist at a large agricultural company develops an internal presentation that explains weather variation and long-term climate change. The scientist presents global annual temperature anomalies (relative to a 1951-1980 average) throughout the last 20 years:

What natural forcing contributed to the temperature trend from 2014 to 2016?

An economist at a large US state pension fund assesses transition risk and opportunities in response to pensioner requests that the fund increase transparency on climate strategies. The economist uses IAMs to inform this analysis.
Which of the following will the economist most likely demonstrate by using IAMs?

An international chemical manufacturing company produces a variety of consumer and industrial goods and services. To progress company alignment with the SDGs, the sustainability director suggests incorporating nature-based strategies.
Which strategy best represents a nature-based solution for the company?

The climate risk team at a global bank works on a sustainability and climate risk report for a forthcoming company strategy meeting. The meeting will focus on bank goals to achieve net zero GHG emissions by 2050. Bank leaders will discuss potential risk exposures the bank may face, as well as possible financial systemic effects.
Which of the following is an example of how systemic climate risk can translate into liquidity risk for the bank?

A multi-industry consortium convenes risk managers from across the globe to discuss climate impacts on global trade and economic growth. A climate modeler leads a discussion on macro-level physical changes in the Earth’s atmosphere and highlights two climatic trends that demonstrate an inverse relationship in recent decades.
What two trends does the modeler highlight?

A financial institution in an East African nation decides to issue its first green bond in international debt capital markets. To encourage executive board approval and funding for this action, the sustainability office describes the first successful sustainable debt issuance that helped launch the global market in green bonds.
Which past bond issuance did the office describe?

An international hotel chain reviews progress on sustainability goals in preparation for an Earth Day marketing campaign. A sustainability director suggests the hotel highlight how its energy and food sustainability initiatives align with UN SDG targets.
Which of the following correctly describes an SDG target that the hotel could align with?

The CRO for a large agriculture company reviews reference scenarios as part of an annual climate scenario analysis exercise. The CRO creates a transition risk matrix that compares four different scenarios - W, X, Y, Z. Scenarios are compared according to scale of emissions cuts and pace of emission cuts. Scale is depicted as business as usual (BAU) to net-zero. Pace is depicted as orderly to disorderly. The CRO uses this matrix to explain transition risk to the company’s executive members:

How should the CRO rank the reference scenarios from lowest level of transition risk to highest level of transition risk?

A technology company announces a goal of increasing recycling programs by 30% and reducing company carbon emissions by 50% by 2040. A climate risk analyst at the company develops a sustainability framework and identifies ways to measure company-level transition and physical risks.
Which of the following should the analyst use to measure company-level transition risk?

To achieve emissions reduction goals, a South American government considers policies other than carbon pricing to target carbon-intensive industries more effectively. The government intends to promote renewable power generation by implementing subsidies.
Which action should the government take to support this subsidy policy?

A European bank surveyed its most prominent clients to assess interest in sustainability-linked loans (SLLs) and green loans. The survey came after a recent study showed higher profitability rates of SLLs and green products than classical banking products. After positive feedback, the bank decides to introduce SLLs and green loans. The bank’s sustainability loan officer writes a new loan product guideline for corporate clients that explains SLLs and green loans.
How will the bank officer describe these loan types?

A telecommunications corporation issues a green bond to finance energy efficiency improvements for the company’s office space worldwide. The company’s risk management department commissions an independent advisory assessment of the bond to check bond alignment with components of the Green Bond Principles.
What action does the corporation take to align the bond with the “process for project evaluation and selection” component of the Green Bond Principles?

A sustainability analyst reports on the following metrics for a global healthcare company:

GHG emissions reductions -
Number of lives saved through pharmaceutical products
To conform with the triple bottom line concept, what additional indicator should the analyst include?

Organizers of an upcoming UN Climate Change Conference prepare a document highlighting successes and failures of climate accords over the last 20 years.
The document lists what success from the 2009 Copenhagen Accord?

A risk consultant begins an engagement for a development agency. The engagement focuses on identifying policies that address climate change impacts. The consultant drafts an action plan that incorporates a roadmap of effective climate policies to present to senior directors at a strategic meeting. The plan includes an introductory summary of the backdrop and effectiveness of historical and current climate policies.
How should the consultant describe the context of climate policy evolution?