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CAIA - Past > CAIA - CIT 4 - Developing an Asset Owner Climate Change Strategy > Flashcards

CAIA - CIT 4 - Developing an Asset Owner Climate Change Strategy Flashcards

1
Q

The ___ ___ is the estimated amount of carbon dioxide the world can emit while maintaining a reasonable chance of limiting increases in global temperature to ___ degrees C above pre-industrial levels. It is estimated to be ___ trillion tons of carbon.

A

The carbon budget is the estimated amount of carbon dioxide the world can emit while maintaining a reasonable chance of limiting increases in global temperature to 2 degrees C above pre-industrial levels. It is estimated to be 1 trillion tons of carbon.

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2
Q

The principles of responsible investment (PRI) are:

  1. Incorporate ESG into ___ ___and ___-___
  2. Be ___ ___
  3. ___ ___on ESG from investments
  4. ___ the principles
  5. ___ the principles
  6. ___ ___ the principles
A

The principles of responsible investment (PRI) are:

  1. Incorporate ESG into investment analysis and decision-making
  2. Be active owners
  3. Seek disclosures on ESG from investments
  4. Promote the principles
  5. Implement the principles
  6. Report on the principles
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3
Q

There are 3 steps to developing a climate change strategy: ___, ___, ___.

A

There are 3 steps to developing a climate change strategy: measure, act, review.

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4
Q

Approaches for assessing exposure to climate change risk and opportunity include:

  1. S
  2. S
  3. E
  4. L
A

Approaches for assessing exposure to climate change risk and opportunity include:

  1. Sector
  2. Stranded assets
  3. Emissions and carbon footprint
  4. Low-carbon exposure
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5
Q

___ ___are fossil fuel energy assets that, before the end of their economic lives, stop generating an economic return due to market and regulatory changes associated with transition to low-carbon economy.

A

Stranded assets are fossil fuel energy assets that, before the end of their economic lives, stop generating an economic return due to market and regulatory changes associated with transition to low-carbon economy.

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6
Q

The UK Environment Agency Pension Fund’s 2015 Policy to Address the Impacts of Climate Change includes a target of ___% of the fund invested in low carbon/energy efficient opportunities; and includes a decarbonization target for its equity portfolio by reducing future emissions by ___% for coal and ___% for oil/gas by ___)

A

The UK Environment Agency Pension Fund’s 2015 Policy to Address the Impacts of Climate Change includes a target of 15% of the fund invested in low carbon/energy efficient opportunities; and includes a decarbonization target for its equity portfolio by reducing future emissions by 90% for coal and 50% for oil/gas by 2020)

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7
Q

In addition to exclusionary strategies, passive managers can also implement ___ strategies.

A

In addition to exclusionary strategies, passive managers can also implement engagement strategies.

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8
Q

Broad tools for monitoring and reporting on climate change risks include:

  1. P
  2. A
  3. B
  4. I
A

Broad tools for monitoring and reporting on climate change risks include:

1. PRI

2. Asset owner disclosure project

3. Balanced scorecards

4. Investor platform for climate action

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9
Q

The investor platform for climate action identifies public records for climate change actions taken by the global investor community in 4 key areas:

  1. M
  2. E
  3. R
  4. R
A

The investor platform for climate action identifies public records for climate change actions taken by the global investor community in 4 key areas:

1. Measurement

2. Engagement

3. Reinforcement

4. Reallocation

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10
Q

The second step associated with acting on climate change strategy involves selecting one of 3 main strategies and executing the strategy:

  1. E
  2. I
  3. A
A

he second step associated with acting on climate change strategy involves selecting one of 3 main strategies and executing the strategy:

1. Engage

2. Invest

3. Avoid

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11
Q

Investment opportunities exist across various asset classes and approaches:

  1. L
  2. T
  3. C
  4. G
  5. R
  6. P
A

Investment opportunities exist across various asset classes and approaches:

1. Low carbon indices

2. Thematic funds

3. Climate aligned bonds (green bonds)

4. Green infrastructure

5. Real Estate

6. Private market

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12
Q

The catholic super is a case study in ___ ___ ___. In 2015 they performed a ___ ___ and then ___with managers.

A

The catholic super is a case study in monitoring external managers. In 2015 they performed a carbon footprint and then engaged with managers.

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13
Q

In the catholic super case study, Australian managers fared (better/worse) than international managers.

A

In the catholic super case study, Australian managers fared worse than international managers.

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14
Q

CalPERS is a case study in ___ with ___.

A

CalPERS is a case study in engaging with companies.

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15
Q

CalPERS believes that companies should report on 3 forms of capital:

  1. F
  2. H
  3. P
A

CalPERS believes that companies should report on 3 forms of capital:

1. Financial

2. Human

3. Physical

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16
Q

Allianz is a case study in ___ ___ ___.

A

Allianz is a case study in assessing carbon risks.

17
Q

Wespath Investment Management is a case study in managing ___ ___ ___.

A

Wespath Investment Management is a case study in managing excessive sustainability risk.

18
Q

Wespath has 5 sustainable investment strategies integrating ESG factors into its investment process:

  1. E
  2. A
  3. P
  4. E
  5. S
A

Wespath has 5 sustainable investment strategies integrating ESG factors into its investment process:

1. Ethical exclusions

2. Active ownership

3. Positive Impact Investment

4. External Manager ESG Integration

5. Strategic Partnerships

19
Q

In 2014 Wespath enhanced its active ownership strategy to focus on ___ ___.

A

In 2014 Wespath enhanced its active ownership strategy to focus on thermal coal.

20
Q

___ ___is the most carbon-intensive fossil fuel.

A

Thermal coal is the most carbon-intensive fossil fuel.

21
Q

The following companies are excluded from investment from Wespath:

  1. Developed country companies with ___% or more revenues from ___ ___
  2. Developing country companies with ___% or more revenues from ___ ___ and in bottom ___% of peergroup.
A

The following companies are excluded from investment from Wespath:

  1. Developed country companies with 50% or more revenues from thermal coal
  2. Developing country companies with 50% or more revenues from thermal coal and in bottom 50% of peergroup.
22
Q

AP7 is a case study in ___-___ ___

A

AP7 is a case study in low-carbon solutions

23
Q

___ is the Swedish government pension fund.

A

AP7 is the Swedish government pension fund.

24
Q

A number of factors are important to the success of clean tech investing:

  1. L
  2. R
  3. D
  4. S
A

A number of factors are important to the success of clean tech investing:

1. Long timeframe

2. Realistic returns

3. Diversification

4. Specialist knowledge

25
Q

AP7 believes the following are needed to scale up clean tech:

  1. C
  2. N
  3. C
A

AP7 believes the following are needed to scale up clean tech:

1. Close funding gap

2. New technologies

3. Carbon price

26
Q

Aegon NV is a case study in ___ ___.

A

Aegon NV is a case study in internal engagement.

27
Q

___ ___ is an international provider of life insurance, pensions, and asset management thta operates in over 25 countries.

A

Aegon NV is an international provider of life insurance, pensions, and asset management that operates in over 25 countries.

28
Q

The AXA Group is a case study in ___ from ___.

A

The AXA Group is a case study in divesting from coal.

29
Q

AXA has stopped investing in:

  1. Mining companies with more than ___% turnover from ___ ___
  2. Electric utilities with more than ___% turnover from ___ ___ ___
A

AXA has stopped investing in:

  1. Mining companies with more than 50% turnover from coal extraction
  2. Electric utilities with more than 50% turnover from coal power generation
30
Q

The Local Government Super (LGS) is a case study in multiple long-term strategies to ___ ___ ___ and ___

A

The Local Government Super (LGS) is a case study in multiple long-term strategies to reduce carbon footprinting and intensity

31
Q

Local government super (LGS) implemented the following strategies:

  1. M
  2. E
  3. E
  4. L
  5. D
  6. I
A

Local government super (LGS) implemented the following strategies:

1. Measure

2. Engage with companies

3. Engage with policy makers

4. Low-carbon investment

5. Divestment and exclusions

6. Independent evaluation

32
Q

Every ___ months, LGS reviews ___ ___ ___ and compares ___to a ___.

A

Every 6 months, LGS reviews carbon risk audits and compares performance to a benchmark.

33
Q

LGS engages with policy makers and regulators through the ___ ___on ___ ___

A

LGS engages with policy makers and regulators through the investor group on climate change (IGCC)

34
Q

LGS does not invest in companies that generate more than ___% of their revenue from carbon-sensitive industries.

A

LGS does not invest in companies that generate more than 33% of their revenue from carbon-sensitive industries.

35
Q

The Dutch healthcare pension fund ___ has committed to increasing sustainable investments to ___% of assets and reducing carbon footprint by ___% by 2020.

A

The Dutch healthcare pension fund PFZW has committed to increasing sustainable investments to 12% of assets and reducing carbon footprint by 50% by 2020.

36
Q

The Dutch civil servants pension fund ___ has committed reducing greenhouse gas emissions by ___% and ___its investments in renewable energy and environmentally friendly technologies by ___.

A

The Dutch civil servants pension fund ABP has committed reducing greenhouse gas emissions by 25% and doubling its investments in renewable energy and environmentally friendly technologies by 2020.

37
Q

The UK’s Environment Agency Pension Fund has reduced its carbon footprint by ___% on active equities and ___% on active bonds.

A

The UK’s Environment Agency Pension Fund has reduced its carbon footprint by 44% on active equities and 42% on active bonds.

38
Q

___ asset classes can participate with the various ways to implement ESG programs. However, private equity, property and infrastructure investments may not be able to ___ ___-___companies because of the ___nature of those companies.

A

Most asset classes can participate with the various ways to implement ESG programs. However, private equity, property and infrastructure investments may not be able to avoid high-carbon companies because of the public nature of those companies.

CAIA - Past (9 decks)

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