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Pass the GARP Certification SCR Questions and answers with Dumpstech

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Questions # 21:

An EU vehicle braking system manufacturer implements a new sustainability framework for SLBs to finance projects with environmental and social benefits. The company sustainability team prepares a new SLB and submits the bond to an external reviewer for assessment. The bond contains four KPIs:

1. Scope 1 CO2 emissions

2. Supplier engagement on GHG emission reduction

3. Percentage of renewable energy used

4. Percentage of women in managerial roles

The bond benchmark year is 2022 and the bond will mature in 2030 Which of the following SPTs did the reviewer find aligns with the core components of SLB Principles?

Options:

Reduce emissions from purchased raw materials by 60% by 2030.

Increase women representation in managerial positions to 33% by 2025 and to 50% by 2030.

Increase renewable energy use to 20% by 2035 and to 50% by 2050.

Engage multiple suppliers to expand commitment to emission reduction targets by 30% by 2030.

Questions # 22:

An alliance of electricity power producers examines a proposed cap-and-trade regulation that would affect most members. The alliance lobbies lawmakers to strengthen banking and borrowing provisions in the proposed regulation, allowing increased flexibility for the sector to comply with emissions limits.

What component of climate risk is the alliance directly attempting to influence?

Options:

Exposure

Hazards

Vulnerability

Drivers

Questions # 23:

A technology company expands its sustainable offerings and develops a flight booking application that allows customers to offset a flight’s carbon emissions. An analyst at the company researches climate agreements to inform the structure of the offsetting program.

How does the analyst describe the achievements and shortcomings of the agreements?

Options:

A shortcoming of COP21 (Paris) is that countries are legally obligated to annually submit nationally determined contributions (NDCs), and most have kept NDCs at unchanged levels.

COP3 (Kyoto) resulted in differentiated national responsibilities wherein developing countries were not subject to emissions reduction obligations, which disincentivized Annex 1 countries to take action.

The main achievement of COP15 (Copenhagen) was the creation of the IPCC, an influential scientific body that became the leading body in guiding subsequent climate agreements.

Although COP1 (Berlin) ended with no binding treaty, it was the first COP to establish a goal that global warming remains below 2°C.

Questions # 24:

Senior management of a sportswear manufacturer will issue a bond to optimize company capital structure, while providing investors with an opportunity to contribute to positive transformation of the fashion industry. Management prefers a bond with a high rate of issuance, and the company sustainability team researches various green and sustainable finance instruments and issuance information over the past 5 years. The team recommends a bond that globally posted the highest growth in issuance between 2019 and 2020.

Which bond did the team recommend?

Options:

Climate bond

Green bond

Sustainability bond

Social bond

Questions # 25:

A prominent institutional investor forms a committee to support global investments to achieve net zero GHG emissions by 2050. To inform this investment strategy, the committee relies on the IEA Net-Zero Scenario.

How should the committee proceed with investments to align with IEA milestones?

Options:

Invest in electric vehicles sufficiently to help make electric vehicles 30% of global vehicle sales by 2030.

Divest nuclear energy assets sufficiently to increase solar and wind energy shares of global energy production to 50% by 2050.

Invest in energy infrastructure sufficiently to ensure all new buildings are “zero-carbon-ready” by 2050.

Divest coal assets sufficiently to support a phase-out of all coal plants in advanced economies by 2030.

Questions # 26:

After recent summer and winter temperature extremes disrupt operations, a national oil company evaluates its 10-year business plan. The risk department reviews how corporate assets, both physical and human, are resilient to climate change. Early in the planning process, a risk team member emphasizes the importance of planning for both acute and chronic climate hazards.

How should the team member describe acute and chronic hazards in terms of the 10-year strategy?

Options:

When determining locations for future production facilities, modeling shifts in climate requires more data on local conditions than modeling changes in wildfire prevalence.

When assessing climate impacts on facility worker productivity, the frequency of heatwaves influences average temperature.

When assessing climate impacts on offshore drilling operations, models of hurricane damage agree more than models of sea level rise.

When considering climate impacts on onshore assets, flood projections are more accurate than mean precipitation change projections.

Questions # 27:

The climate risk team at a global bank works on a sustainability and climate risk report for a forthcoming company strategy meeting. The meeting will focus on bank goals to achieve net zero GHG emissions by 2050. Bank leaders will discuss potential risk exposures the bank may face, as well as possible financial systemic effects.

Which of the following is an example of how systemic climate risk can translate into liquidity risk for the bank?

Options:

High level of deposit withdrawals from households and corporations after a hurricane severely affects a country.

Sea level rise causes coastal property prices to decrease, which leads to real estate losses for the bank.

Insurers significantly increase premiums due to climate-related risks and leave the bank without coverage, amplifying risks to financial stability.

Sector-wide asset stranding for the financial sector increases due to climate pressures, which affects bank revenue and profits as cash flow decreases.

Questions # 28:

Senior management at a global manufacturer of commercial flooring explores strategies to reduce capital costs and improve company valuation, resulting in a comprehensive sustainability strategy. Management determines all future flooring products will be carbon neutral across their full product life cycle. The risk team is tasked with updating the company ERM framework in accordance with COSO guidelines to include ESG and climate-related risks. The team reviews and updates each of the ERM components.

What action should the team recommend the company take as part of the communication component of the ERM framework?

Options:

Determine which transmission channel of climate risk drivers is most relevant for the company.

Assess the relative importance of various climate risk and sustainability risk drivers.

Build climate risk into existing legal and compliance processes.

Establish processes to convey climate and sustainability risk exposure.

Questions # 29:

A product manager at a regional bank analyzes customer feedback and sustainability trends to enhance bank offerings. After completing the review, the manager recommends a new consumer-facing product to attract sustainability-conscious customers. Which product does the manager most likely recommend?

Options:

SLLs to finance properties in areas prone to physical climate risk

Green loans to support general-purpose financing secured from sustainable sources

Green car loans designed to finance modern EVs

Sustainable credit cards with rewards for purchase of eco-certified products

Questions # 30:

Which of the following greenhouse gases (GHGs) has the longest lifetime in the atmosphere?

Options:

Methane

Carbon dioxide

Fluorinated gas

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