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Chartered Investment Manager (CIM) Practice Exam · Question

A Canadian portfolio manager is evaluating the performance of a sustainable equity fund. Which factor would they primarily consider in an ESG (Environmental, Social, Governance) assessment?

ESG investing incorporates environmental (e.g., carbon footprint), social (e.g., employee treatment, community relations), and governance (e.g., board structure

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Question: A Canadian portfolio manager is evaluating the performance of a sustainable equity fund. Which factor would they primarily consider in an ESG (Environmental, Social, Governance) assessment?

Answer options:

  • The fund's sensitivity to interest rate changes.
  • The company's marketing budget. ✅ The company's environmental impact, labour practices, and board diversity.
  • The fund's daily trading volume.

Correct answer: The company's environmental impact, labour practices, and board diversity.

Explanation: ESG investing incorporates environmental (e.g., carbon footprint), social (e.g., employee treatment, community relations), and governance (e.g., board structure, executive compensation) factors into investment decisions.

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