[GFS] Green Finance Specialist Certification
Exam Guide
**Question 1. Which greenhouse gas has the highest global warming potential (GWP) over a
100‑year horizon?**
A) Carbon dioxide (CO₂)
B) Methane (CH₄)
C) Nitrous oxide (N₂O)
D) Sulphur hexafluoride (SF₆)
Answer: D
Explanation: SF₆ has a GWP of about 23,500 times that of CO₂ over 100 years, far exceeding the
others.
**Question 2. The “Tragedy of the Horizon” refers to:**
A) The inability of markets to price long‑term climate risks
B) The loss of biodiversity in the next decade
C) The rapid depletion of fossil fuel reserves
D) The short‑term volatility of renewable energy prices
Answer: A
Explanation: It describes how investors and policymakers discount climate impacts beyond
typical investment horizons, leading to underinvestment in mitigation.
**Question 3. A “stranded asset” in the context of climate finance is:**
A) An asset that is fully depreciated
B) An asset that can no longer generate expected cash flows due to climate policies or market
shifts
C) An asset that is physically damaged by a natural disaster
D) An asset located in a remote area with limited market access
Answer: B
,[GFS] Green Finance Specialist Certification
Exam Guide
Explanation: Stranded assets lose value because they become uneconomic under stricter
climate regulations or decarbonisation trends.
**Question 4. Which of the following best distinguishes mitigation from adaptation projects?**
A) Mitigation reduces greenhouse gas emissions; adaptation reduces vulnerability to climate
impacts.
B) Mitigation increases energy efficiency; adaptation increases renewable generation.
C) Mitigation focuses on water resources; adaptation focuses on carbon markets.
D) Mitigation is always financed by bonds; adaptation is always financed by loans.
Answer: A
Explanation: Mitigation targets the cause (emissions), while adaptation addresses the effects
(vulnerability).
**Question 5. The Paris Agreement’s long‑term temperature goal is to limit warming to:**
A) 1.5 °C above pre‑industrial levels
B) 2 °C above pre‑industrial levels
C) Both 1.5 °C and 2 °C, with a preference for 1.5 °C
D) No specific temperature target, only net‑zero emissions by 2050
Answer: C
Explanation: The Agreement aims to hold warming “well below 2 °C” and pursue efforts to limit
it to 1.5 °C.
**Question 6. Which Sustainable Development Goal (SDG) directly relates to affordable and
clean energy?**
A) SDG 7
B) SDG 9
,[GFS] Green Finance Specialist Certification
Exam Guide
C) SDG 12
D) SDG 13
Answer: A
Explanation: SDG 7 is “Affordable and Clean Energy,” targeting universal access to sustainable
energy.
**Question 7. The EU Taxonomy defines an economic activity as “green” when it makes a
substantial contribution to:**
A) At least one of six environmental objectives and does no significant harm to the others.
B) Only climate change mitigation.
C) Any environmental objective, regardless of impact on others.
D) The achievement of national renewable targets.
Answer: A
Explanation: The taxonomy uses the “Do No Significant Harm” (DNSH) principle across six
objectives.
**Question 8. Which disclosure framework requires companies to report on governance,
strategy, risk management, and metrics related to climate?**
A) GRI
B) TCFD
C) SASB
D) CDP
Answer: B
Explanation: The Task Force on Climate‑Related Financial Disclosures (TCFD) focuses on those
four pillars.
, [GFS] Green Finance Specialist Certification
Exam Guide
**Question 9. Central banks conducting climate‑related stress tests primarily assess:**
A) Credit risk of sovereign bonds
B) Liquidity risk of commercial banks
C) Financial system resilience to physical and transition climate risks
D) Operational risk of payment systems
Answer: C
Explanation: Climate stress tests evaluate how extreme climate scenarios affect banks’ balance
sheets.
**Question 10. The primary purpose of green deposit policies is to:**
A) Increase the interest rates on all deposits
B) Direct retail deposits toward environmentally sustainable projects
C) Mandate banks to hold a minimum amount of green assets
D) Provide tax incentives for depositors
Answer: B
Explanation: Green deposits allow savers to earmark funds for green lending, aligning deposits
with environmental goals.
**Question 11. Which international body coordinates the global carbon market under the
UNFCCC?**
A) World Bank
B) International Monetary Fund (IMF)
C) International Emissions Trading Association (IETA)
D) United Nations Framework Convention on Climate Change (UNFCCC) Secretariat
Answer: D
Exam Guide
**Question 1. Which greenhouse gas has the highest global warming potential (GWP) over a
100‑year horizon?**
A) Carbon dioxide (CO₂)
B) Methane (CH₄)
C) Nitrous oxide (N₂O)
D) Sulphur hexafluoride (SF₆)
Answer: D
Explanation: SF₆ has a GWP of about 23,500 times that of CO₂ over 100 years, far exceeding the
others.
**Question 2. The “Tragedy of the Horizon” refers to:**
A) The inability of markets to price long‑term climate risks
B) The loss of biodiversity in the next decade
C) The rapid depletion of fossil fuel reserves
D) The short‑term volatility of renewable energy prices
Answer: A
Explanation: It describes how investors and policymakers discount climate impacts beyond
typical investment horizons, leading to underinvestment in mitigation.
**Question 3. A “stranded asset” in the context of climate finance is:**
A) An asset that is fully depreciated
B) An asset that can no longer generate expected cash flows due to climate policies or market
shifts
C) An asset that is physically damaged by a natural disaster
D) An asset located in a remote area with limited market access
Answer: B
,[GFS] Green Finance Specialist Certification
Exam Guide
Explanation: Stranded assets lose value because they become uneconomic under stricter
climate regulations or decarbonisation trends.
**Question 4. Which of the following best distinguishes mitigation from adaptation projects?**
A) Mitigation reduces greenhouse gas emissions; adaptation reduces vulnerability to climate
impacts.
B) Mitigation increases energy efficiency; adaptation increases renewable generation.
C) Mitigation focuses on water resources; adaptation focuses on carbon markets.
D) Mitigation is always financed by bonds; adaptation is always financed by loans.
Answer: A
Explanation: Mitigation targets the cause (emissions), while adaptation addresses the effects
(vulnerability).
**Question 5. The Paris Agreement’s long‑term temperature goal is to limit warming to:**
A) 1.5 °C above pre‑industrial levels
B) 2 °C above pre‑industrial levels
C) Both 1.5 °C and 2 °C, with a preference for 1.5 °C
D) No specific temperature target, only net‑zero emissions by 2050
Answer: C
Explanation: The Agreement aims to hold warming “well below 2 °C” and pursue efforts to limit
it to 1.5 °C.
**Question 6. Which Sustainable Development Goal (SDG) directly relates to affordable and
clean energy?**
A) SDG 7
B) SDG 9
,[GFS] Green Finance Specialist Certification
Exam Guide
C) SDG 12
D) SDG 13
Answer: A
Explanation: SDG 7 is “Affordable and Clean Energy,” targeting universal access to sustainable
energy.
**Question 7. The EU Taxonomy defines an economic activity as “green” when it makes a
substantial contribution to:**
A) At least one of six environmental objectives and does no significant harm to the others.
B) Only climate change mitigation.
C) Any environmental objective, regardless of impact on others.
D) The achievement of national renewable targets.
Answer: A
Explanation: The taxonomy uses the “Do No Significant Harm” (DNSH) principle across six
objectives.
**Question 8. Which disclosure framework requires companies to report on governance,
strategy, risk management, and metrics related to climate?**
A) GRI
B) TCFD
C) SASB
D) CDP
Answer: B
Explanation: The Task Force on Climate‑Related Financial Disclosures (TCFD) focuses on those
four pillars.
, [GFS] Green Finance Specialist Certification
Exam Guide
**Question 9. Central banks conducting climate‑related stress tests primarily assess:**
A) Credit risk of sovereign bonds
B) Liquidity risk of commercial banks
C) Financial system resilience to physical and transition climate risks
D) Operational risk of payment systems
Answer: C
Explanation: Climate stress tests evaluate how extreme climate scenarios affect banks’ balance
sheets.
**Question 10. The primary purpose of green deposit policies is to:**
A) Increase the interest rates on all deposits
B) Direct retail deposits toward environmentally sustainable projects
C) Mandate banks to hold a minimum amount of green assets
D) Provide tax incentives for depositors
Answer: B
Explanation: Green deposits allow savers to earmark funds for green lending, aligning deposits
with environmental goals.
**Question 11. Which international body coordinates the global carbon market under the
UNFCCC?**
A) World Bank
B) International Monetary Fund (IMF)
C) International Emissions Trading Association (IETA)
D) United Nations Framework Convention on Climate Change (UNFCCC) Secretariat
Answer: D
