Sustainable Finance Flashcards

You may prefer our related Brainscape-certified flashcards:
1
Q

UBS how many will pay more for a sustainable product?

A

69%

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2
Q

Across the MDBs backed by all G7 countries, how much debt is outstanding.?

A

USD 400 billion

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3
Q

4 reasons why sustainable data is not high quality

A
  1. limited standardisation
  2. varying amounts of data disclosed
  3. inconsistent location (it is spread across multiple reports)
  4. limited assurance (some firms use partial data)
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4
Q

What were some of the main shifts in practice since mid-2010s?

A

Considerable resources and expertise
Attract larger pool of institutional capital
Objective decision-making encourages efficiency

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5
Q

In 2023, are fees from sustainable issuance
greater than fees from the fossil fuel
industry.

A

In 2023, for the second year in the row,
fees from sustainable issuance were
greater than fees from the fossil fuel
industry.

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6
Q

How much is invested in private markets today?

A

ca. USD 300-400bn

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7
Q

How many (%) private market firms integrate ESG into their analysis?

A

70%

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8
Q

What are challenges of multilateral development bank bond (MDB)?

A

lack of transparency
Conflicting sustainability priorities
corruption

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9
Q

What are the disadvantages when building a sustainable investing strategy in a smaller firm?

A

Smaller pool of assets
Limited media footprint

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10
Q

What are the most popular standards?

A

ISSB
GRI
CSRD

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11
Q

What do charities & foundation investors care a lot about in sustainable investing?

A

Reputation protection, manager integrity, mission alignment

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12
Q

How much in % of thematic fund assets are actively managed?

A

Roughly 75 %

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13
Q

How much (%) does the USA embrace sustainability?

A

45%

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14
Q

What key building blocks did the traditional portfolios lack?

A

single currency investment-grade funds
corporate emerging market bond funds
gold

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15
Q

What is the challenges for sustainability-linked bond?

A

Greenwashing risk + financial impact

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16
Q

How many (in%) investors are not in favor for a single standard?

A

34%

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17
Q

How many (%) private market firms employ at least one full-time person in the area of sustainability?

A

20%

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18
Q

How does an engagement process typically function?

A
  1. Engagement priorities are defined
  2. portfolios are scanned for relevant targets
  3. an engagement strategy will be defined
  4. tools to succeed
  5. final analysis
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19
Q

What are challenges for recycled gold?

A

Cost
Scale
Provenance

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20
Q

How much (%) does the EU embrace sustainability?

A

80

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21
Q

Do exclusions help people and planet?

A

The use of exclusions does not have a direct material positive impact on people and planet

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22
Q

What are challenges for use-of-proceed bond?

A

Greenwashing risk
Liquidity risk
Portfolio construction risk

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23
Q

2 Challenges when implementing exclusion?

A
  1. Data quality
  2. Differing values
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24
Q

Challenges to MSCI rating?

A
  1. difficult to compare different sectors
  2. big firms have consultants to increase their rating
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25
Q

Which 3 countries have the least developed regulatory ecosystem?

A

US, China and Turkey

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26
Q

Does engagement impact investment returns?

A

Does engagement impact investment returns?

There is some evidence engagement can increase investment returns.

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27
Q

What are sustainable mortgages?

A

What are sustainable mortgages?

Sustainable - often called green - mortgages reward borrowers who either purchase an energy efficient home or commit to make improvements (bonus 110%)

28
Q

Who has the most developed regulatory ecosystem?

A

European Union and Brazil

29
Q

Do exclusions decrease investment returns?

A

maybe -ciclical

30
Q

How much (in%) data produced by a corporate is suitable for potential comparison?

A

around 50% (the rest is idiosyncratic)

31
Q

The issuance of bonds exceeds since their 2008 debut exceeds?

A

3 tril

32
Q

How many banks are using “double materiality”?

A

52%

33
Q

According to Goldman Sachs, how many assets are managed with sustainable engagement?

A

USD 1 trillion

34
Q

Which bank got the most fees from fossil fuel issuance?

A

Wells Fargo

35
Q

According to the Global Sustainable Investing Alliance (GSIA), how big is the sustainable investing industry?

A

35 tril

36
Q

What are the ratings used by Sustainalitics?

A

the higher the worse
Negligible (0-10) Low (10-20) Medium (20-30) High (30-40) Severe (40+)

37
Q

What are the characteristics of thematic investing?

A

Growth bias
diversification
purity
Active

38
Q

How popular are traditional approaches, according to Goldman Sachs?

A

How popular are traditional approaches, according to Goldman Sachs?

sustainable public debt market funds receive just 20-30 per cent of the inflows enjoyed by their equity counterparts

39
Q

What are the advantages when building a sustainable investing strategy in a large firm?

A

Large pool of existing assets
Impressive media footprint
Impressive network
Lots of resources

40
Q

On what will the assessment for sutainable mortgages be based on?

A

an Energy Performance Certificate
(EPC)

41
Q

In Europe, how much (in %) thematic fund assets are active funds?

A

90

42
Q

How many (%) private market firms employ at least 30% women at the executive level?

A

10

43
Q

What are the skills and expectations of an Environmental Social Governance (ESG) integration expert?

A

Skills: Research, academic, theory, financial materiality, investing
Expectations: To build a credible process that supports investment performance and client needs

44
Q

How much is the Micro-credit ecosystem worth?

A

200 bill

45
Q

What do private wealth investors care a lot about in sustainable investing?

A

What do private wealth investors care a lot about in sustainable investing?

Confidence in the manager’s advice and integrity, a sense of security, investment returns, purpose

46
Q

What are the disadvantages when building a sustainable investing strategy in a large firm?

A

Complex organization
Multiple stakeholders

47
Q

What are the advantages when building a sustainable investing strategy in a smaller firm?

A

Board and CEO level support
Closely knit organization
Limited bureaucracy

48
Q

What are the skills and expectations of an Industry talking head?

A

What are the skills and expectations of an Industry talking head?

Skills: Public speaking, investor/client presentations, networking
Expectations: To raise the profile of the firm and to build sustainability-related credibility in the marketplace

49
Q

How many sustainable regulation were there in 2022?

A

around 850

50
Q

How many (%) private market firms consider diversity and inclusion important for investments?

A

90%

51
Q

Integration Process

A
  1. Material ESG issues will be identified
  2. Measurement of ESG issues will be defined
  3. Economic rationales
  4. Financial impacts will be assessed
52
Q

Do sustainable private markets add financial performance?

A

yes, 20% excess returns

53
Q

How many key issues does MSCI consider?

A

35

54
Q

How popular is thematic investing in 2020?

A

USD 800 billion

55
Q

What are challenges for microcredit?

A

Event risk
Foreign exchange risk
Liquidity risk

56
Q

How many thematic funds out of 10 outperformed a conventional benchmark?

A

Just one in 10 thematic funds outperformed a conventional benchmark.

57
Q

How much (%) does Asia embrace sustainability?

A

55

58
Q

Which bank got the most fees from sustainable issuance?

A

BNB Paribas

59
Q

How many (%) private market firms have formal diversity and inclusion strategy?
40%

A

40

60
Q

What are the three categories of the Credit Suisse categorization for banks?

A

Green
Transition
Social

61
Q

Does integration impact investment returns?

A

positive relationship between ESG adherence and performance

62
Q

What were the typical characteristics of sustainable private markets investments?

A

Charitable foundations
Small tickets
High costs
Concentration in emerging markets
Focus on bottom of the pyramid

63
Q

What is the Principles for Responsible Banking (PRB)?

A

a framework for ensuring bank
practice aligns with the Sustainable
Development Goals and the Paris
Climate Agreement.

64
Q

What do institutional investors care a lot about in sustainable investing?

A

Investment returns, the manager’sability to manage money, process,resources

65
Q
A