CFA Institute Exam ESG-Investing Topic 2 Question 1 Discussion

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

Question #: 1
Topic #: 2

[All ESG-Investing Questions]

In contrast to engagement, monitoring is more likely to result in:

Achanged company behaviors.

Ba two-way sharing of perspectives.

Cefficient capital allocation by investors.

Show Suggested Answer

Suggested Answer: C

Monitoring focuses on tracking a company's performance and ensuring that the investment aligns with ESG objectives, leading to more efficient capital allocation based on data-driven insights. (ESGTextBook[PallasCatFin], Chapter 6, Page 283)

by Kristian at Nov 17, 2024, 06:02 AM

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Lenna

4 months ago

Hah, this question is a real head-scratcher. I bet the answer is C - efficiency is key when you're just monitoring those investments, not actually engaging with the company. Gotta keep those numbers looking good!

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Cecily

3 months ago

Yeah, I agree. Keeping a close eye on things without getting too involved can lead to better capital allocation.

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Nu

3 months ago

I think you're onto something there. Efficiency is definitely important when it comes to monitoring investments.

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Santos

4 months ago

B sounds like the right answer to me. Monitoring is all about building that two-way street, you know? Gotta make sure the company is listening to the investors as much as the other way around.

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Felix

4 months ago

I'm gonna have to go with A. Monitoring is a one-way street, so it's more likely to change company behavior than promote mutual understanding. Gotta keep those executives on their toes!

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Gearldine

3 months ago

Exactly, it's all about ensuring transparency and accountability.

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Tricia

3 months ago

True, but ultimately it's about making sure the company is accountable.

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Shala

4 months ago

But I think monitoring can also lead to better communication with stakeholders.

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Leslie

4 months ago

I agree, monitoring definitely keeps companies in check.

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Nickie

4 months ago

Definitely C. Monitoring is all about keeping tabs on investments, not sharing ideas. That's what engagement is for - the fancy dinner meetings with the CEO.

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