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CFA Level 2 - Corporate Issuers - Environmental, Social, and Governance (ESG) Considerations in Investment Analysis
Beginner
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An analyst is evaluating the ESG performance of a major automotive manufacturer. The company has made significant investments in electric vehicle technology and has set ambitious targets for reducing its carbon footprint. However, the company has faced criticism for its labor practices in its global supply chain, including allegations of worker exploitation and unsafe working conditions. Which of the following should the analyst prioritize in their assessment?
a.
The analyst should prioritize the company's labor practices and supply chain management, as these issues pose significant risks to the company's reputation and long-term financial performance.
b.
The analyst should prioritize the company's carbon footprint reduction targets, as these are the most widely recognized and quantifiable metrics for assessing a company's environmental performance and are increasingly important to investors.
c.
The analyst should prioritize the company's investments in electric vehicle technology, as this demonstrates the company's commitment to environmental sustainability and positions it for long-term growth in the low-carbon economy.
Beginner