SASB Level 1 Basic Stuff 150 Questions with 100% Complete Solutions/Verified

SASB Level 1 Basic Stuff 150 Questions with 100% Complete Solutions/Verified Investors use sustainability information to: - Correct Answers • IMPROVE FINANCIAL PERFORMANCE: improve their ability to achieve abovemarket returns; • HEDGE AGAINST RISK: reduce risk and volatility, and protect against diminished returns; and • ADVANCE SUSTAINABILITY: improve environmental and social investment outcomes, with financial returns as an equivalent or a secondary consideration. What impact does sustainability information have on price volatility? - Correct Answers It is a strong signal for price volatility. Companies with higher sustainability or ESG ratings have lower price and earnings per share (EPS) volatility than those with low sustainability performance scores. Notably, the researchers found that sustainability information was the only reliable signal for predicting EPS volatility, providing better insight than traditional measures such as return on equity (ROE). Do companies with above-average ESG scores avoid major losses more than others? - Correct Answers Yes What are the benefits of sustainability info to private equity? - Correct Answers Improve portfolio performance, mitigate risk, and generate alpha (the excess return of an investment relative to the return of a benchmark index.). Why do companies internally demand sustainability information? - Correct Answers Sustainability data can help provide insight into financial performance and contribute to success in the near, medium, and long term. It also can reduce cost of capital. What institutions (not internal or investors) demand sustainability information? - Correct Answers 1. Policy-based initiatives (such as the Action Plan for Financial Sustainable Growth) 2. Nations 3. Non-policy efforts (such as guidance from stock exchanges) 4. Industry Groups: (Accountancy Europe, Global Asset Owner Forum, Global Financial Markets Association) What prompted the development of financial information systems? - Correct Answers The Great Depression