SASB FSA LEVEL 1 EXAM QUESTIONS
AND ANSWERS
ECA - Answer- environmental cost accounting - aims to analyze cause-and-effect
relationships to identify the source of and measure environmental impacts
EP&L - Answer- environmental profit and loss statements - seeks to assign a monetary
value to the environmental costs associated with certain business activities
SRI - Answer- socially responsible investing
problem with short-termism - Answer- though increases market liquidity, persistent
short-termism may undermine the efficiency of capital markets and result in diminished
public confidence and depressed returns
CDP - Answer- carbon disclosure project:
-supports companies, cities, states, and regions
-measure and manage environmental risks and opportunities
-compiles and scores companies:
A: environmental leadership
D: low environmental awareness
F: failure to report sufficient information
CDSB - Answer- Carbon Disclosure Standards Board:
-offers companies a framework to disclose environmental information with the same
rigor used to report financial information
-encourages standardization of environmental reporting
-helps investors, analysts, companies, regulators, stock exchanges, and accounting
firms consider the impacts of natural capital
-series of *principles* to abide by in reporting
GRI - Answer- global reporting initiative:
-independent standard-setting organization
-helps companies/organizations report significant impacts on economy, environment,
and surrounding society
IIRC - Answer- International Integrated Reporting Council
-<IR> Framework
- helps companies connect sustainability disclosure to reporting on financial and other
capitals:
1. financial
2. manufactured
3. intellectual
4. human
, 5. social and relationship
6. natural
SASB - Answer- Sustainability Accounting Standards Board
-covers environmental, social, and governance topics most likely to be material
financially to companies in a given industry
TCFD - Answer- Task Force on Climate-related Financial Disclosures:
-Principles-based framework for climate-related financial disclosure
-provide information to investors, lenders, insurers, and other stakeholders
-strong focus on risks and opportunities associated with transition to low-carbon
economy
Canada sustainability reporting requirements - Answer- 2010: CSA (Canadian
Securities Administration) Staff Notice delineated a number of disclosure requirements
related to ESG
2019: expansion on 2010 report to identify and disclose material climate change risks to
investors
EU sustainability reporting requirements - Answer- 2014: Non-Financial Reporting
Directive (NFRD) compels public-interest companies to report sustainability information
-principles-based (material; fair/balanced/understandable; comprehensive but concise;
strategic and forward-looking; stakeholder-oriented; consistent and coherent)
2015: France Law on Energy Transition for Green Growth requires publicly listed
companies to implement low-carbon strategies in every component of their activities
EU Taxonomy: extremely specific criteria for evaluating economic activities, including
through social lens
EU Taxonomy, Jan 2022: companies expected to disclose turnover derived from
activities that are environmentally sustainable and, when applicable, capital
expenditures and operating expenditures associated with qualifying activities
United States sustainability reporting requirements - Answer- US SEC, 2010: guidance
explaining how companies should apply existing disclosure requirements to climate
change information that might be appropriate to disclose
SEC 2010 guidance: - Answer- obligation to disclose how climate change affects the
following:
-legislative and regulatory impacts
-international accords
-indirect consequences of regulation or business trends
-physical impacts of climate change
Brundtland Report - Answer- Published in 1987 in the influential report "Our Common
Future" and created by World Commission on Environment and Development of the UN.
Discusses sustainable development and the triple bottom line for the first time.
AND ANSWERS
ECA - Answer- environmental cost accounting - aims to analyze cause-and-effect
relationships to identify the source of and measure environmental impacts
EP&L - Answer- environmental profit and loss statements - seeks to assign a monetary
value to the environmental costs associated with certain business activities
SRI - Answer- socially responsible investing
problem with short-termism - Answer- though increases market liquidity, persistent
short-termism may undermine the efficiency of capital markets and result in diminished
public confidence and depressed returns
CDP - Answer- carbon disclosure project:
-supports companies, cities, states, and regions
-measure and manage environmental risks and opportunities
-compiles and scores companies:
A: environmental leadership
D: low environmental awareness
F: failure to report sufficient information
CDSB - Answer- Carbon Disclosure Standards Board:
-offers companies a framework to disclose environmental information with the same
rigor used to report financial information
-encourages standardization of environmental reporting
-helps investors, analysts, companies, regulators, stock exchanges, and accounting
firms consider the impacts of natural capital
-series of *principles* to abide by in reporting
GRI - Answer- global reporting initiative:
-independent standard-setting organization
-helps companies/organizations report significant impacts on economy, environment,
and surrounding society
IIRC - Answer- International Integrated Reporting Council
-<IR> Framework
- helps companies connect sustainability disclosure to reporting on financial and other
capitals:
1. financial
2. manufactured
3. intellectual
4. human
, 5. social and relationship
6. natural
SASB - Answer- Sustainability Accounting Standards Board
-covers environmental, social, and governance topics most likely to be material
financially to companies in a given industry
TCFD - Answer- Task Force on Climate-related Financial Disclosures:
-Principles-based framework for climate-related financial disclosure
-provide information to investors, lenders, insurers, and other stakeholders
-strong focus on risks and opportunities associated with transition to low-carbon
economy
Canada sustainability reporting requirements - Answer- 2010: CSA (Canadian
Securities Administration) Staff Notice delineated a number of disclosure requirements
related to ESG
2019: expansion on 2010 report to identify and disclose material climate change risks to
investors
EU sustainability reporting requirements - Answer- 2014: Non-Financial Reporting
Directive (NFRD) compels public-interest companies to report sustainability information
-principles-based (material; fair/balanced/understandable; comprehensive but concise;
strategic and forward-looking; stakeholder-oriented; consistent and coherent)
2015: France Law on Energy Transition for Green Growth requires publicly listed
companies to implement low-carbon strategies in every component of their activities
EU Taxonomy: extremely specific criteria for evaluating economic activities, including
through social lens
EU Taxonomy, Jan 2022: companies expected to disclose turnover derived from
activities that are environmentally sustainable and, when applicable, capital
expenditures and operating expenditures associated with qualifying activities
United States sustainability reporting requirements - Answer- US SEC, 2010: guidance
explaining how companies should apply existing disclosure requirements to climate
change information that might be appropriate to disclose
SEC 2010 guidance: - Answer- obligation to disclose how climate change affects the
following:
-legislative and regulatory impacts
-international accords
-indirect consequences of regulation or business trends
-physical impacts of climate change
Brundtland Report - Answer- Published in 1987 in the influential report "Our Common
Future" and created by World Commission on Environment and Development of the UN.
Discusses sustainable development and the triple bottom line for the first time.
