SUSTAINABLE-INVESTING practice question 20 of 35

Determining which ESG issues are material:

Full set: 802 questions
Answer options
A: Involves judgment Correct answer
B: Excludes impacts on short-term financial performance
C: Is a process that is independent of a company's industry and business model
Correct Answer:
A. Involves judgment
Explanation

Determining the materiality of ESG issues involves judgment, as it depends on various factors, including the company’s industry, business model, and operating environment. Material ESG factors are those that have the potential to significantly impact a company’s long-term financial performance.ESG Reference: Chapter 7, Page 371 - ESG Analysis, Valuation & Integration in the ESG textbook.

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