FSA Level 1 Exam Study Guide (SASB FSA Level 1 Exam
Study Guide Questions and Key Topics.) Questions With
Complete Solutions
A national securities commission announced that starting next
year, all listed companies will be required to disclose ESG
performance. The announcement was accompanied by new
sustainability disclosure guidance. The guidance provides a
reporting template that specifies which disclsorue topics
companies must report, including specific metrics and units of
measurement related to economic, environmental and social
performance. During the first three years of the disclosure
mandate, companies may choose to omit certain metrics if they
provide sound rationale explaining why the information is not
yet available. What tow characteristics of regulatory disclosure
guidance does this reflect? Correct Answers Line-item &
Comply-or-explain
A reporting company believes that its sustainability performance
metrics change frequently and require extensive contextual
information for report users to accurately interpret. The
company wants to disclose sustainability information with
robust contextual information and wants the ability to update the
information throughout the year. Which disclosure location
addresses this company's communication needs? Correct
Answers Web-based format
A third-party assurance provider is supplying reasonable
assurance services for a company's sustainability disclosure,
which includes SASB-aligned information. Which component of
SASB Standards should the assurance provider reference to
,consistently evaluate the subject matter? Correct Answers Each
metrics's technical protocols
An analyst at an investment bank is conducting a discounted
cash flow (DCF) analysis as part of their evaluation of a group
of telecommunications companies. The analyst adjusts their
original analysis based on each company's performance on the
same SASB metric. This event demonstrates that the specific
metric met which characteristic of SASB accounting metrics?
Correct Answers Understandable
An analyst is assessing the default risk of a vegetable producer
located in a region with high baseline water stress. What
security type is this analyst most likely assessing? Correct
Answers Debt
An analyst wants to understand the connection between a
company's sustainability data and one of four financial drivers
(revenue, cost, assets and liabilities and cost of capital that are
relevant to a DCF analysis. Choose the pairing that correctly
matches a data type with its relevance to a DCF analysis.
Correct Answers Data about regulatory compliance: operational
performance and cost structure.
An analyst working in a small asset management company has
been tasked with analyzing how sustainability topics affect the
risk profile of the firm's portfolios using the Sustainable Industry
Classification System (SICS). The analyst notices that climate
change is an important topic for several of the industries in
which the firm is invested. Which two if the following options
explain why using SICS was likely more helpful than using a
, traditional industry classification system? Correct Answers
SICS groups industries based on sustainability-related risks and
opportunities; SICS yields differentiated, financially-material
climate impacts across industries
An investment analyst is assessing the annual emissions of two
dairy producers. Company A discloses its emissions using an in-
depth lifecycle analysis (LCA) at the product level. Company B
discloses its emissions using a national facilities level
greenhouse gas inventory. What challenge does this represent in
sustainability reporting? Correct Answers Companies use a
wide range of subject-matter-specific methodologies
Besides companies and their investors, what other institutions
influence demand for sustainability information? Correct
Answers The performance benefits that investors and
companies experience when integrating sustainability
information into their decision-making process are not the only
factors driving demand for it. Other organizations, both public
and private influence global ESG dialogue
Completeness is an important concept in disclosures of material
information. For a company in an industry where workplace
safety is likely to be material, if a company with 0 fatalities but
1,000 near-misses only discloses the number of fatal accidents,
then investors are missing the complete picture. In the
Automobile industry, information about the safety of a
company's car models is likely to be material. Which three
metrics, when taken together, are most likely to represent a
complete disclosure? Correct Answers Number of safety-related
Study Guide Questions and Key Topics.) Questions With
Complete Solutions
A national securities commission announced that starting next
year, all listed companies will be required to disclose ESG
performance. The announcement was accompanied by new
sustainability disclosure guidance. The guidance provides a
reporting template that specifies which disclsorue topics
companies must report, including specific metrics and units of
measurement related to economic, environmental and social
performance. During the first three years of the disclosure
mandate, companies may choose to omit certain metrics if they
provide sound rationale explaining why the information is not
yet available. What tow characteristics of regulatory disclosure
guidance does this reflect? Correct Answers Line-item &
Comply-or-explain
A reporting company believes that its sustainability performance
metrics change frequently and require extensive contextual
information for report users to accurately interpret. The
company wants to disclose sustainability information with
robust contextual information and wants the ability to update the
information throughout the year. Which disclosure location
addresses this company's communication needs? Correct
Answers Web-based format
A third-party assurance provider is supplying reasonable
assurance services for a company's sustainability disclosure,
which includes SASB-aligned information. Which component of
SASB Standards should the assurance provider reference to
,consistently evaluate the subject matter? Correct Answers Each
metrics's technical protocols
An analyst at an investment bank is conducting a discounted
cash flow (DCF) analysis as part of their evaluation of a group
of telecommunications companies. The analyst adjusts their
original analysis based on each company's performance on the
same SASB metric. This event demonstrates that the specific
metric met which characteristic of SASB accounting metrics?
Correct Answers Understandable
An analyst is assessing the default risk of a vegetable producer
located in a region with high baseline water stress. What
security type is this analyst most likely assessing? Correct
Answers Debt
An analyst wants to understand the connection between a
company's sustainability data and one of four financial drivers
(revenue, cost, assets and liabilities and cost of capital that are
relevant to a DCF analysis. Choose the pairing that correctly
matches a data type with its relevance to a DCF analysis.
Correct Answers Data about regulatory compliance: operational
performance and cost structure.
An analyst working in a small asset management company has
been tasked with analyzing how sustainability topics affect the
risk profile of the firm's portfolios using the Sustainable Industry
Classification System (SICS). The analyst notices that climate
change is an important topic for several of the industries in
which the firm is invested. Which two if the following options
explain why using SICS was likely more helpful than using a
, traditional industry classification system? Correct Answers
SICS groups industries based on sustainability-related risks and
opportunities; SICS yields differentiated, financially-material
climate impacts across industries
An investment analyst is assessing the annual emissions of two
dairy producers. Company A discloses its emissions using an in-
depth lifecycle analysis (LCA) at the product level. Company B
discloses its emissions using a national facilities level
greenhouse gas inventory. What challenge does this represent in
sustainability reporting? Correct Answers Companies use a
wide range of subject-matter-specific methodologies
Besides companies and their investors, what other institutions
influence demand for sustainability information? Correct
Answers The performance benefits that investors and
companies experience when integrating sustainability
information into their decision-making process are not the only
factors driving demand for it. Other organizations, both public
and private influence global ESG dialogue
Completeness is an important concept in disclosures of material
information. For a company in an industry where workplace
safety is likely to be material, if a company with 0 fatalities but
1,000 near-misses only discloses the number of fatal accidents,
then investors are missing the complete picture. In the
Automobile industry, information about the safety of a
company's car models is likely to be material. Which three
metrics, when taken together, are most likely to represent a
complete disclosure? Correct Answers Number of safety-related
