FSA LEVEL II PART 1: IDENTIFYING
MATERIAL FINANCIAL IMPACTS EXAM
What are three primary considerations for understanding the sustainability profile of a
company? - Correct Answers -social license to operate, use of common capitals,
externalities
The acceptance of business from local, regional and national community - Correct
Answers -social license to operate
Non-financial resources available to industry as source of value creation but not owned
or controlled by companies in industry - Correct Answers -common capitals
What three factors are considered when determining a company's differences from
SICS industry - Correct Answers -operations, operating environment, governance
What two internal factors determine if company fits within scope of SICS industry? -
Correct Answers -revenue, inputs
Engineering firms enhancing capabilities around green buildings affects peer companies
through which of the five factors? - Correct Answers -industry norms, best practices and
competitive drivers
Industries characterized by the presence of NGO monitoring could be affected by which
of the five factors? - Correct Answers -stakeholder concerns and social trends
Footwear companies failing to pay living wages in developing market factories could
affect a company through which of the five factors? - Correct Answers -stakeholder
concerns and social trends
Which of the five factors is linked to industries responding to changes in environmental
and social economic trends? - Correct Answers -opportunities for innovation
What external factors can affect a company's SASB reporting topics? - Correct Answers
-Business, regulatory, economic, operating location
This external factor to determine disclosures is defined by competitive forces and peer
company behaviors - Correct Answers -business climate
, This external factor to determine disclosures is defined by regional conditions such as
taxes, inflation, interest rates and commodity prices - Correct Answers -economic
climate
This external factor to determine disclosures is defined by presence of current and
possibly future regulation, legal actions, and penalties - Correct Answers -regulatory
climate
This external factor to determine disclosures is defined by availability of common
capitals and exposure to physical risks of climate change - Correct Answers -operating
location
Operational factors and operating environments can lead to different SASB standards
being disclosed over time due to - Correct Answers -dynamic materiality
four pillars of ESG management - Correct Answers -governance, strategy, risk
management, performance metrics and targets
Process for evaluating ESG issues for financial materiality - Correct Answers -SASB
standards, evaluate contextual factors (operations and environment), analyze
performance
SASB sustainability dimensions - Correct Answers -environment, social capital, human
capital, business model & innovation, leadership & governance
SASB standards only capture _____ emissions - Correct Answers -Scope 1
What emissions do the SASB standards track - Correct Answers -CO2, CH4, N2O,
HFCs, PFCs, SF6, NF3
The environment SASB sustainability dimension includes the following categories -
Correct Answers -GHG emissions, air quality, energy management, water & wastewater
management, waste & hazardous materials management, ecological impacts
The social capital SASB sustainability dimension includes the following categories -
Correct Answers -human rights & community relations, customer privacy, data security,
access & affordability, product quality & safety, customer welfare, selling practices &
product labeling
The human capital SASB sustainability dimension includes the following categories -
Correct Answers -labor practices, employee health & safety, employee engagement
diversity & inclusion
The business model & innovation SASB sustainability dimension includes the following
categories - Correct Answers -product design & lifecycle management, business model
MATERIAL FINANCIAL IMPACTS EXAM
What are three primary considerations for understanding the sustainability profile of a
company? - Correct Answers -social license to operate, use of common capitals,
externalities
The acceptance of business from local, regional and national community - Correct
Answers -social license to operate
Non-financial resources available to industry as source of value creation but not owned
or controlled by companies in industry - Correct Answers -common capitals
What three factors are considered when determining a company's differences from
SICS industry - Correct Answers -operations, operating environment, governance
What two internal factors determine if company fits within scope of SICS industry? -
Correct Answers -revenue, inputs
Engineering firms enhancing capabilities around green buildings affects peer companies
through which of the five factors? - Correct Answers -industry norms, best practices and
competitive drivers
Industries characterized by the presence of NGO monitoring could be affected by which
of the five factors? - Correct Answers -stakeholder concerns and social trends
Footwear companies failing to pay living wages in developing market factories could
affect a company through which of the five factors? - Correct Answers -stakeholder
concerns and social trends
Which of the five factors is linked to industries responding to changes in environmental
and social economic trends? - Correct Answers -opportunities for innovation
What external factors can affect a company's SASB reporting topics? - Correct Answers
-Business, regulatory, economic, operating location
This external factor to determine disclosures is defined by competitive forces and peer
company behaviors - Correct Answers -business climate
, This external factor to determine disclosures is defined by regional conditions such as
taxes, inflation, interest rates and commodity prices - Correct Answers -economic
climate
This external factor to determine disclosures is defined by presence of current and
possibly future regulation, legal actions, and penalties - Correct Answers -regulatory
climate
This external factor to determine disclosures is defined by availability of common
capitals and exposure to physical risks of climate change - Correct Answers -operating
location
Operational factors and operating environments can lead to different SASB standards
being disclosed over time due to - Correct Answers -dynamic materiality
four pillars of ESG management - Correct Answers -governance, strategy, risk
management, performance metrics and targets
Process for evaluating ESG issues for financial materiality - Correct Answers -SASB
standards, evaluate contextual factors (operations and environment), analyze
performance
SASB sustainability dimensions - Correct Answers -environment, social capital, human
capital, business model & innovation, leadership & governance
SASB standards only capture _____ emissions - Correct Answers -Scope 1
What emissions do the SASB standards track - Correct Answers -CO2, CH4, N2O,
HFCs, PFCs, SF6, NF3
The environment SASB sustainability dimension includes the following categories -
Correct Answers -GHG emissions, air quality, energy management, water & wastewater
management, waste & hazardous materials management, ecological impacts
The social capital SASB sustainability dimension includes the following categories -
Correct Answers -human rights & community relations, customer privacy, data security,
access & affordability, product quality & safety, customer welfare, selling practices &
product labeling
The human capital SASB sustainability dimension includes the following categories -
Correct Answers -labor practices, employee health & safety, employee engagement
diversity & inclusion
The business model & innovation SASB sustainability dimension includes the following
categories - Correct Answers -product design & lifecycle management, business model
