Deck 12: International Sustainability Reporting

Question 1

The SASB's Social Capital category includes which of the following topics?

A) Labor relations
B) Product packaging
C) Human rights and community relations
D) Systemic risk management

Answer 1

C

Question 2

Within the GRI, Environmental Standards:

A) Cover energy consumption as well as labor practices
B) Cover biodiversity
C) Require quantitative disclosures about emissions, such as the volume of ozone-depleting emissions by weight
D) Cover biodiversity & require quantitative disclosures about emissions, such as the volume of ozone-depleting emissions by weight

Answer 2

D

Question 3

Which best describes the categories in which GRI standards are organized?

A) Environmental, Social, and Governmental
B) Universal, Economic, Environment, and Social
C) Economic, Governmental, and Social
D) Governmental, Private, and Economic

Answer 3

B

Question 4

The theory that sustainability reporting is a means of dealing with the firm's exposure to political, economic, and social pressures is called:

A) Government Accountability Theory
B) Stakeholder Theory
C) Consumer Theory
D) Legitimacy Theory

Question 5

If a pharmaceutical company wanted to report about the access and affordability of its drug products, the disclosures would fall under which of the SASB's sustainability reporting categories?

A) Human Capital
B) Social Capital
C) Environment
D) Leadership and Governance

Question 6

ESG is an acronym for:

A) Environmentally Specific Gases
B) Environmental, Social, and Governance
C) European Sustainability Goals
D) Ecologically Safe Groundwater

Question 7

Which is true of Socially Responsible Investors (SRIs)?

A) They accounted for over half of all investments under professional management in 2016
B) The social and environmental performance of a company is a significant factor in their investment decisions
C) They put more weight on social capital reporting when making investment decisions compared to the other sustainability issues (such as the environment or human capital)
D) They all invest in the same standardized index of SRI-friendly companies

Question 8

Which of the following statements is true of sustainability reporting?

A) It replaces traditional financial reporting outside the United States, but is only an optional supplementary reporting system within the US.
B) It is required by law on a global level for all public companies.
C) There is only one standard method for presenting sustainability reporting, and it is used by a majority of companies who choose to publish their sustainability metrics.
D) It augments traditional financial reporting and can be presented as a standalone additional report or as an integrated report.

Question 9

Which is true of corporate social responsibility reporting (CSR)?

A) It is another term for sustainability reporting
B) It is the standardized term for sustainability reporting in the EU
C) It is a variant of traditional financial reporting required by the SEC
D) It is another term for sustainability reporting & It is the standardized term for sustainability reporting in the EU

Question 10

The theory that sustainability reporting emerged as a response to stakeholders' demands for environmental and social information is called:

A) Legitimacy Theory
B) Stakeholder Theory
C) Consumer Theory
D) Social Responsibility Theory

Question 11

The SASB's Human Capital category includes which of the following topics?

A) Data security
B) Air quality
C) Human rights and community relations
D) Fair labor practices

Question 12

Within the GRI, Universal Standards provide users with:

A) General information about the entity's reporting policies
B) Basic economic data about the entity
C) Information about ethical issues, such as corruption or anti-competitive behavior
D) All of the above

Question 13

The SASB's Leadership and Governance category includes which of the following topics?

A) Diversity and inclusion
B) Customer welfare
C) Competitive behavior
D) Product quality and safety

Question 14

The SASB's Environmental category includes which of the following topics?

A) Fuel management
B) Human rights and community relations
C) Employee health, safety, and wellbeing
D) Business ethics and transparency

Question 15

Within the GRI, Economic Standards provide users with:

A) General information about the entity's reporting policies
B) Basic economic data about the entity
C) Information about ethical issues, such as corruption or anti-competitive behavior
D) Basic economic data about the entity & Information about ethical issues, such as corruption or anti-competitive behavior

Question 16

Which is an accurate statement about the positive correlation found between companies' sustainability performance and traditional financial performance?

A) Efficient cost-cutting is likely to reduce the consumption of energy, water, packaging, and other resources
B) Environmentally responsible companies are much more likely to underperform in the long run
C) More social and environmental responsibility is negatively correlated with traditional financial performance
D) All of these are accurate

Question 17

Which of the following best describe the concept of materiality as used by the GRI?

A) Companies should avoid using toxic materials
B) Companies should disclose information if it has the potential to significantly affect stock prices.
C) Materiality has two dimensions: importance to stakeholders and importance to the company's operating decision makers
D) Companies should disclose information if it has the potential to significantly affect stock prices & Materiality has two dimensions: importance to stakeholders and importance to the company's operating decision makers

Question 18

GRI is an acronym for:

A) Global Research Institute
B) Global Reporting Initiative
C) Greenhouse Reporting for Industries
D) Green Regulation Initiative

Question 19

An alternative to a stand-alone sustainability report is a system in which sustainability disclosures are woven into the company's annual report. This system is called:

A) Traditional Reporting
B) Integrated Reporting
C) Consolidated Reporting
D) Incorporated Reporting

Question 20

The SASB's Business Model and Innovation category includes which of the following topics?

A) Fair marketing and advertising
B) Recruitment, development, and retention
C) Lifecycle Impacts of products
D) Accident and safety management

Question 21

What best describes the SASB's materiality map?

A) It describes which materials are the most toxic to the environment
B) It focuses on the pollutants emitted by the company's operations and ranks them from most to least damaging
C) It was developed by companies to respond to stakeholder pressure for environmental stewardship
D) It's an objective study of nonfinancial materiality viewed through an investment lens

Question 22

Which of the following sustainability topics is most likely to be highly material to a social media company, such as Facebook?

A) Data security
B) Child labor in the factories of suppliers
C) Biodiversity impacts on endangered species.
D) Product safety

Question 23

In what parts of a company's Form 10-K does Release No. 33-9106 (issued by the SEC in 2010) require companies to include threats and opportunities posed by climate change?

A) Only in the Management Discussion and Analysis section
B) In Risk Factors and Legal Proceedings
C) In Management Discussion and Analysis and Risk Factors
D) In Business Description, Legal Proceedings, Risk Factors, and Management Discussion and Analysis

Question 24

The International Standards Organization (ISO) has published standards explicitly relating to:

A) Anti-bribery management systems
B) Social responsibility
C) Environmental management
D) All of the above

Question 25

What are GHGs?

A) Governmental heating guides
B) Governmental hierarchy of gases
C) Greenhouse gases
D) Good health guides

Question 26

According to the Greenhouse Gas Protocol, which of the following gases contributes most to global warming per kilogram of emissions?

A) Methane
B) Sulfur hexafluoride
C) Nitrous oxide
D) Carbon monoxide

Question 27

What is the basic unit used to measure and report greenhouse gas emissions?

A) Carbon monoxide equivalent
B) Methane equivalent
C) Nitrous oxide equivalent
D) Carbon dioxide equivalent

Question 28

Which is not true of the Sustainability Accounting Standards Board (SASB)?

A) Its counterpart in traditional financial reporting is FASB
B) Its intended audience is explicitly the investment community
C) It was developed for the EU and later adopted by the US
D) All of the above are true.

Question 29

Which is not true about the sustainability reporting framework used by the Hong Kong Stock Exchange (HKEX)?

A) Companies listed on the exchange must either report their performance for a given key performance indicator or else explain why they are not able to do so.
B) GHG emissions and amounts of hazardous waste produced are key performance indicators in the HKEX sustainability reporting system
C) The HKSEX sustainability reporting system has been in place for over 20 years
D) Metrics taken from the GRI, the Climate Disclosure Project, ISO 26000, or RobecoSAM/Dow Jones Sustainability Index survey that will satisfy the reporting requirements.

Question 30

Which of the following are examples of sustainability reporting that is mandatory in the United States?

A) The legally mandated disclosure of mine safety data
B) The mandatory disclosure of environmental litigation in the Legal Proceedings section of the 10-K
C) The disclosure in the MD&A section of the 10-K of the effects of climate change on the company's business operations
D) All of the above are examples of mandatory sustainability reporting in the United States

Question 31

Which of the following is true of the Carbon Disclosure Project (CDP)?

A) The CDP is a system of mandatory reporting
B) The CDP was established by the U.S. SEC
C) The CDP works with over 6,000 companies worldwide to promote greenhouse gas emissions reporting
D) The CDP was established by the U.S. SEC & The CDP works with over 6,000 companies worldwide to promote greenhouse gas emissions reporting

Question 32

Which of the following is an example of a specific disclosure required for GRI 305: Environment - Emissions?

A) Habitats protected or restored
B) Percentage of recycled materials used in manufacturing
C) Direct greenhouse gas emissions by weight
D) Percentage of recycled materials used in manufacturing & Direct greenhouse gas emissions by weight

Question 33

What is an example of a specific disclosure required for GRI 406: Human Rights - Nondiscrimination?

A) Number of suppliers that are minority-owned
B) Total number of incidents of discrimination
C) Corrective actions taken in response to any situations involving discrimination
D) Total number of incidents of discrimination & corrective actions taken

Question 34

Which of the following best describes sustainability reporting in the European Union?

A) Few EU-domiciled companies opt to report on sustainability, as it is not required
B) Large companies throughout the EU must report using the GRI, the OECD's guidelines for multinational corporations, or ISO 26000.
C) The penalties for lack of sustainability reporting are the same in every country
D) The EU used to mandate sustainability reporting, but dropped this requirement after the United Kingdom's BREXIT decision.

Question 35

Within the GRI, Social Standards:

A) Cover human rights and product responsibility
B) Require the entity to identify operations or suppliers that are at risk of employing child labor
C) Cover human rights and product responsibility & require the entity to identify operations or suppliers that are at risk of employing child labor
D) None of the above apply

Question 36

Which of the following is not a sustainability reporting framework?

A) Carbon Disclosure Project (CDP)
B) Sustainability-related standards published by the International Standards Organization (ISO)
C) RobecoSAM Corporate Sustainability Assessment (CSA)
D) All of these are sustainability reporting frameworks

Question 37

According to the Greenhouse Gas Protocol, which would fall under Scope 1 Emissions?

A) Emissions traceable to the purchase of energy to power a factory
B) Emissions from employees' cars on their daily commute to work
C) Direct emissions by the entity as a result of producing goods and services
D) Emissions from the company's customers

Question 38

Which is an accurate comparison between the SASB and GRI?

A) The SASB only considers the government's perspective while the GRI considers the perspective of a broad range of stakeholders
B) SASB's reporting system is designed to inform shareholders' investment decisions, while the GRI's goals are broader and more general
C) Both the SASB and the GRI are only geared toward those who qualify as Socially Responsible Investors
D) SASB's reporting system is designed to inform shareholders' investment decisions, while the GRI's goals are broader and more general & Both the SASB and the GRI are only geared toward those who qualify as Socially Responsible Investors

Question 39

Which of the following sustainability topics is most likely to be highly material to a pharmaceutical company, such as Pfizer?

A) Fuel management
B) Child labor in the factories of suppliers
C) Scope 1 greenhouse gas emissions
D) Product quality and safety

Question 40

Which of the following sustainability topics is most likely to be highly material to an apparel company, such as Nike?

A) Data security
B) Child labor in the factories of suppliers
C) Biodiversity impacts on endangered species.
D) Product safety

Question 41

An auto company reporting its carbon emissions using the Greenhouse Gas Protocol is likely to report the lion's share of its emissions in which category?

A) Scope 1
B) Scope 2
C) Scope 3
D) Scope 4

Question 42

In measuring an organization's carbon footprint using the Greenhouse Gas Protocol, which of the following is the most challenging to account for and measure?

A) Scope 1
B) Scope 2
C) Scope 3
D) Scope 4

Question 43

What do companies mean when they assert that their sustainability reports are GRI-informed?

A) Their reports have been produced in compliance with all reporting directives of the GRI
B) Their reports have been produced in compliance with core reporting directives of the GRI
C) They use the GRI as a point of reference, but preserve flexibility to make their own sustainability reporting choices.
D) Auditors have attested to the degree of conformity between the company's sustainability reports and GRI standards.

Question 44

Aluminum plants consume huge quantities of electricity in the production of aluminum. An aluminum producer reporting its carbon emissions using the Greenhouse Gas Protocol is likely to classify the lion's share of its emissions in which category?

A) Scope 1
B) Scope 2
C) Scope 3
D) Scope 4

Question 45

According to the Greenhouse Gas Protocol, which would fall under Scope 2 Emissions?

A) Emissions traceable to the purchase of energy to power a factory
B) Emissions from employees' cars on their daily commute to work
C) Direct emissions by the entity as a result of producing goods and services
D) Emissions from the company's customers

Question 46

Imagine that two firms who burn massive amounts of fossil fuel during their daily operations are merged to create a single company. Which of these statements is accurate?

A) Their environmental performance scores will automatically suffer because the scale of their emissions will grow
B) The measurement of the new company's emissions intensity will be scaled by a size variable, such as units produced or sales revenue
C) Their environmental performance may be enhanced by streamlining operations and pooling R&D insights
D) The measurement of the new company's emissions intensity will be scaled by a size variable, such as units produced or sales revenue & Their environmental performance may be enhanced by streamlining operations and pooling R&D insights

Question 47

What does external assurance mean in the context of sustainability reporting?

A) Insurance purchased to cover fines for environmental damage
B) Hiring a third party to attest to the claims made in a sustainability report
C) Hiring a third party to publicize the company's sustainability initiatives
D) Hiring a third party to provide environmental consulting

Question 48

According to the Greenhouse Gas Protocol, which would fall under Scope 3 Emissions?

A) Emissions from purchased goods
B) Emissions from business travel
C) Emissions from purchased goods & Emissions from business travel
D) Neither emissions from purchased goods nor emissions from business travel

Question 49

Which are among the largest Scope 1 emitting entities?

A) Building materials companies, such as LafargeHolcim
B) Electric utilities companies that burn substantial amounts of fossil fuels
C) Local businesses that people must drive long distances to get to
D) Building materials companies, such as LafargeHolcim & Electric utilities companies that burn substantial amounts of fossil fuels

Question 50

According to the Greenhouse Gas Protocol, which is not a Scope 3 emissions category?

A) Upstream transportation and distribution
B) Employee commuting
C) Emissions from burning coal in the company's power plant
D) End-of-life treatment of sold products