Question 1

The risk team at an agricultural company in Easter Europe evaluates crop yield production performance. The evaluation reveals high temperature and water shortages will likely harm crop production, and current company insurance will not mitigate this exposure. The team recommends increasing coverage by purchasing an additional insurance policy that includes area yield protection. According to the COSO ERM framework, which risk response strategy did the team recommend?

Options :

A : Pursuit

B : Sharing

C : Reduction

D : Acceptance

Answer: C

Question 2

A climate analyst at a research institution analyzes climate risk for various companies. The analyst examines transmission channels of climate risk as part of the risk identification process. Which of the following examples can the analyst use to describe an operational risk transmission channel?

Options :

A : A damaging hurricane leads to a run on credit as affected communities need cash to fund recovery efforts

B : Following a high carbon tax, a company strands high-emissions assets.

C : High commodity prices boost revenues for a mining company that extracts lithium

D : Flooding damages an information technology company data center.

Answer: D

Question 3

An environmental agency for a southeast Asian nation increases funding to study historic climate change and its impacts. The agency funds a proposal for a scientific subject matter expert to conduct a large-scale study of the nation’s tree rings. What information will this study most likely reveal?

Options :

A : Temperature anomalies up to 1°C

B : Frequency of climate tipping points

C : Temperature anomalies up to 10°C

D : Frequency of global ice ages

Answer: A

Question 4

After launching new large-scale sites for engine testing, a global automaker prepares a GHG inventory report according to the GHG Protocol. An analyst on the sustainability team gathers data for the assessment. The analyst identifies emissions from production processes, previously deemed irrelevant at the corporate level, now constitute over 25% of company aggregated GHG emissions across plant sites. Which GHG Protocol principle did the company analyst follow?

Options :

A : Consistency

B : Accuracy

C : Transparency

D : Completeness

Answer: D

Question 5

A sustainability analyst at a global energy company assesses trends in the electric power sector for the next 10 years. To inform strategy, the analyst focuses on the interaction among climate risks, advancements in renewable energy, and stranded asset risk for fossil fuels. According to the analyst, what trend will likely emerge during the next decade?

Options :

A : The global levelized cost of energy for renewables increases to compete with fossil fuel energy generation.

B : Solar and wind newbuilds require stronger subsidies to be competitive in most parts of the world

C : The transportation sector faces technology risk if the trajectory of the learning curve for battery storage remains the same.

D : Power plants that replace natural gas with coal will reduce transition risks in the event of rising carbon prices.

Answer: B

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