A diversified industrial company embarks on a climate transition strategy to invest in a more fuel-efficient airline fleet. To finance the investment, the CSO analyzes sustainable finance instruments and recommends instruments most suitable to issue.
Which of the following financial instruments should the CSO recommend and why?

• A.A green bond because the use of proceeds can be clearly identified and tied to a particular project.
• B.A social bond as it offers more flexibility because there is no external review requirement.
• C.A sustainable bond so the company will benefit from favorable pricing from the terms linked to the corporate sustainability objective.
• D.A sustainability-linked bond for the purpose of financing a company-wide transition strategy.

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At an international finance bank, a lack of staff clarity regarding sustainability, climate, and ESG definitions led to overlapping and inefficient initiatives. To minimize inefficiencies, the sustainability department develops new terminology for use across the bank.
What should the department include in this new terminology?

• A.Sustainability issues fall exclusively within climate change impacts.
• B.ESG and sustainability risks are completely interchangeable.
• C.Sustainability should include all governance and social risks.
• D.ESG risks are broader than all sustainability risks.

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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?

• A.Evidence from the past two decades has accumulated that warming levels will lead to tipping points, supporting an international consensus and policies around a goal of limiting warming to 2.5°C.
• B.As global mean annual temperatures rose significantly in the 1980s, scientific consensus around human influence on climate solidified, leading to the formation of the IPCC.
• C.The first attempts to create international climate policies and accords focused on emissions reductions occurred in the 1970s, as anthropogenic GHG emissions were globally recognized as fact by scientists.
• D.After the World Climate Summit, global climate policy legally required countries responsible for the greatest share of cumulative emissions to cut back emissions the most.

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A credit loan officer at a commercial bank reviews a loan application from a company engaged in coal-fired power generation. The loan officer examines transition risks associated with the company's business strategy.
What policy risk driver should the loan officer identify?

• A.Lending to a coal-fired power plant will hurt the bank's public image.
• B.Prices of solar photovoltaic panels have declined since 2015.
• C.Activists and advocacy organizations increasingly file lawsuits against fossil fuel-based power companies.
• D.A government proposes legislation to mandate closure of all coal-fired power plants by 2035.

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The national meteorological agency of a small African nation forms a team to identify and assess extreme climate events in the region. The team leader introduces extreme attribution science along with data and techniques used to connect climate change to extreme events.
To attribute extreme events to climate change, what information will be most useful for the team to collect?

• A.Future projections of global emissions
• B.Statistical analysis of historic drought occurrences
• C.Cross-hatching that indicates climate model agreement
• D.Community exposure to increased flooding events

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