Module 4: Social Factors Quiz Flashcards
(33 cards)
Quiz #1 No.1
Which of the following social issues is likely to be most relevant to low- to middle-income countries?
A. An aging population
B. Access to medicines
C. Anti-microbial resistance
B. Access to medicines
Explanation:
In low- to middle-income countries (LMICs), access to medicines is a critical social issue because of the following reasons:
Limited healthcare infrastructure:
Many LMICs struggle with inadequate healthcare systems, making it difficult for populations to access essential medicines.
High cost of medicines:
Many people in LMICs cannot afford essential medicines due to poverty and lack of subsidies or insurance coverage.
Prevalence of infectious and chronic diseases:
Diseases like malaria, tuberculosis, and HIV/AIDS are more common in LMICs, and access to affordable and effective medicines is crucial to address these public health challenges.
Supply chain issues:
Medicines may not be easily available in rural or remote areas due to logistical challenges.
Addressing this issue is vital for improving public health outcomes and achieving sustainable development goals (SDGs) related to health.
Why the other options are less relevant:
A. An aging population:
This is more relevant to high-income countries, where lower birth rates and longer life expectancies lead to aging populations. In LMICs, populations tend to be younger due to higher birth rates and shorter life expectancies.
C. Anti-microbial resistance (AMR):
While AMR is a global concern, it is not as immediate or pressing for LMICs compared to access to medicines. However, addressing AMR does require better access to appropriate antibiotics and medical care, which is tied to the broader issue of medicine access.
Quiz #1 No.2
Within the transportation sector, advances in artificial intelligence are most likely to result in fewer employment opportunities for:
A. mechanics.
B. taxi drivers.
C. bulldozer operators.
B. Taxi drivers
Explanation:
Advances in artificial intelligence (AI) and related technologies, such as autonomous vehicles, are most likely to impact taxi drivers in the transportation sector. AI-powered self-driving cars are increasingly being developed and tested by companies like Tesla, Waymo, and Uber, with the potential to replace human drivers in the future.
Key Points:
Autonomous vehicles: AI systems can navigate roads, detect obstacles, and operate vehicles without human intervention, directly reducing the need for human taxi drivers.
On-demand ride services: Ride-hailing companies are investing heavily in autonomous technology to reduce costs associated with employing drivers.
Job impact: As self-driving technology becomes more widespread and reliable, the demand for taxi drivers is expected to decline significantly.
Why the other options are less likely:
A. Mechanics:
While AI may assist mechanics (e.g., through predictive maintenance and diagnostics), it is unlikely to replace them entirely. Repairs and maintenance of vehicles, including autonomous ones, will still require human expertise and hands-on skills.
C. Bulldozer operators:
Although AI and automation are being introduced in construction (e.g., autonomous bulldozers), this technology is not as advanced or widespread as in the taxi/transportation sector. Bulldozer operators are less likely to face immediate job displacement compared to taxi drivers.
Quiz #1 No.3
According to the Organisation for Economic Co-operation and Development, income inequality is:
A. contributing to the increase in the purchasing power of the middle class.
B. decreasing with globalization, skill-biased technological change, and changes in countries’ policy approaches.
C. determined as the ratio between the average income of the richest 10% of the population to the poorest 10% of the population.
C. determined as the ratio between the average income of the richest 10% of the population to the poorest 10% of the population.
Explanation:
The Organisation for Economic Co-operation and Development (OECD) defines income inequality as a measure of how unevenly income is distributed across a society. A common way to quantify income inequality is by comparing the average income of the richest 10% of the population to the poorest 10%. This is referred to as the income decile ratio.
Key Points:
Income decile ratio: This ratio gives a clear picture of inequality by showing how much wealthier the top 10% of earners are compared to the bottom 10%.
The OECD also uses other measures, such as the Gini coefficient, which measures inequality on a scale from 0 (perfect equality) to 1 (maximum inequality).
Rising income inequality is a concern because it can lead to reduced social cohesion, slower economic growth, and increased poverty.
Why the other options are incorrect:
A. contributing to the increase in the purchasing power of the middle class:
Income inequality typically reduces the purchasing power of the middle and lower-income classes, as a larger share of income is concentrated in the hands of the wealthy.
B. decreasing with globalization, skill-biased technological change, and changes in countries’ policy approaches:
On the contrary, globalization and skill-biased technological change have often increased income inequality, particularly in developed countries, as they disproportionately benefit higher-skilled workers and capital owners.
Conclusion:
The OECD measures income inequality as the ratio between the average income of the richest 10% of the population to the poorest 10%, making C the correct answer.
Quiz #1 No.4
In which of the following parts of the supply chain for a food processing company is forced labor most likely to be found?
A. Producers of the raw agricultural ingredients processed by the company
B. Casual laborers who work for the company only during busy seasons
C. Purchasing agents that source the raw agricultural ingredients
A. Producers of the raw agricultural ingredients processed by the company
Explanation:
Forced labor is most likely to be found in the production of raw agricultural ingredients in the supply chain. This is because the agricultural sector, particularly in low- and middle-income countries, is often characterized by:
Vulnerable workers:
Many agricultural workers are migrant laborers, women, or individuals from impoverished backgrounds, making them susceptible to exploitation and forced labor practices.
Lack of oversight:
The early stages of the supply chain (e.g., farms, plantations, or fisheries) often operate in regions with weak regulatory enforcement, increasing the risk of forced labor.
High-demand crops:
Crops like cocoa, coffee, sugar, and palm oil are frequently linked with forced labor and child labor, as these industries rely heavily on manual labor under exploitative conditions.
Complexity of supply chains:
Food processing companies often source from multiple suppliers, making it challenging to monitor labor practices at the production level.
Why the other options are less likely:
B. Casual laborers who work for the company only during busy seasons:
While casual laborers may face poor working conditions or low wages, they are typically employed directly by the company or its contractors, where forced labor is less common due to greater oversight.
C. Purchasing agents that source the raw agricultural ingredients:
Purchasing agents are typically professionals employed by the company and are less likely to be victims of forced labor. However, they may unknowingly source from suppliers that exploit forced labor at the production level.
Quiz #1 No.5
A portfolio analyst is modeling the potential impact of a safety incident with multiple fatalities on its mining sector holdings. Which of the following ratios is most likely to be affected as a result?
A. Asset turnover
B. Days of receivables
C. Liabilities-to-assets ratio
C. Liabilities-to-assets ratio
Explanation:
A safety incident with multiple fatalities in the mining sector is a serious event that can have significant financial and reputational consequences for a company. The liabilities-to-assets ratio is most likely to be affected because such incidents can lead to:
Increased liabilities:
Lawsuits, fines, and compensation for victims or their families can significantly increase the company’s liabilities.
Regulatory penalties and cleanup costs may also add to financial obligations.
Potential asset impairments:
The company may face operational disruptions, such as mine closures or production halts, which could lead to reduced asset values.
Reputational damage could affect the valuation of intangible assets, potentially leading to write-downs.
Worsened financial health:
The liabilities-to-assets ratio measures the proportion of a company’s assets financed by liabilities. An increase in liabilities and/or a decrease in assets would worsen this ratio, signaling higher financial risk.
Why the other options are less likely:
A. Asset turnover:
Asset turnover measures how efficiently a company generates revenue from its assets. While a safety incident could disrupt operations and reduce short-term revenue, this ratio is less directly impacted than the liabilities-to-assets ratio.
B. Days of receivables:
Days of receivables measure how quickly a company collects payments from customers. A safety incident is unlikely to directly affect this ratio, as it primarily pertains to operational efficiency in managing accounts receivable.
Quiz #1 No.6
A developed country with an aging population is most likely to:
A. achieve higher per capita savings levels.
B. spend more per person on consumer goods.
C. have a proportionately larger active workforce.
A. achieve higher per capita savings levels.
Explanation:
In a developed country with an aging population, the following trends related to savings and workforce dynamics are typically observed:
Higher per capita savings levels:
Older populations, particularly those approaching retirement, tend to accumulate savings during their working years to support themselves in retirement. This can lead to higher overall per capita savings.
Additionally, as wealth is often concentrated among older individuals in developed countries, their personal savings levels may skew the national per capita average upward.
Spending patterns and workforce dynamics:
Aging populations generally spend less on consumer goods and services compared to younger and middle-aged populations. Instead, they focus more on healthcare and other necessities.
Over time, as the population ages further, savings may decline due to retirees drawing down their savings (dis-saving), but this happens later in the demographic transition.
Why the other options are incorrect:
B. Spend more per person on consumer goods:
Aging populations tend to spend less overall on consumer goods like clothing, electronics, and leisure activities as they enter retirement. Instead, expenditures shift toward healthcare and services related to aging.
C. Have a proportionately larger active workforce:
Aging populations result in a smaller active workforce relative to the total population. This is because a larger proportion of people are retired, reducing the percentage of individuals in the labor force.
Quiz #1 No.7
In 2019, the first lithium-ion battery cell gigafactory project was initiated in the European Union to reduce dependency on imports from other countries. This dependency on imports is due to which social megatrend?
A. Globalization
B. Inequality and wealth creation
C. Automation and artificial intelligence
A. Globalization
Explanation:
The establishment of a lithium-ion battery cell gigafactory in the European Union (EU) in 2019 was aimed at reducing the region’s dependency on imports of critical technology and materials from other countries (particularly China and other East Asian nations). This dependency is a direct result of globalization, which has driven the concentration of certain industries (like battery manufacturing) in specific regions due to factors such as:
Global supply chains:
Over the decades, globalization has led to the specialization of production in certain countries where costs are lower or expertise is concentrated. For example, East Asia dominates lithium-ion battery production due to established supply chains, economies of scale, and resource availability.
Trade reliance:
The EU has relied on imports for advanced batteries, which are crucial for industries like electric vehicles and renewable energy storage. This reliance exposes the region to supply chain disruptions and geopolitical risks.
Strategic autonomy:
To reduce reliance on global trade for critical components, the EU initiated the gigafactory project as part of its push for strategic autonomy and to strengthen its position in the global energy transition.
Why the other options are incorrect:
B. Inequality and wealth creation:
While globalization can contribute to inequality, the dependency on imports of lithium-ion batteries is not directly related to inequality or wealth creation trends.
C. Automation and artificial intelligence:
While automation and AI are transforming manufacturing, they are not the primary drivers of the EU’s dependency on imports. The reliance stems from the global distribution of manufacturing capabilities, not automation or AI innovations.
Quiz #1 No.8
An investment fund scores its potential investments on a scale of 1 to 10 (with 10 being the best) based on the contributions they make to the environmental objectives under the EU taxonomy for sustainable activities. The following table shows how each company’s score has changed over the past year.
Transition to a Circular Economy Climate Change Adaptation Pollution Prevention and Control Total
Company 1 +6 –2 +3 +7
Company 2 0 +7 0 +7
Company 3 +3 +2 +2 +7
Which company best complies with the EU taxonomy for sustainable activities?
A. Company 1
B. Company 2
C. Company 3
Explanation:
The EU taxonomy for sustainable activities is a classification system designed to guide investments toward activities that significantly contribute to one or more of six environmental objectives, including:
Climate change mitigation
Climate change adaptation
Transition to a circular economy
Pollution prevention and control
Sustainable use of water and marine resources
Protection and restoration of biodiversity and ecosystems
To comply with the EU taxonomy, an activity must substantially contribute to one or more objectives without significantly harming any other objectives (referred to as the Do No Significant Harm (DNSH) principle).
Assessment of the Companies:
Company 1:
Total score: +7
Strength: Significant contribution to the circular economy (+6).
Weakness: Negative impact on climate change adaptation (–2), which could violate the DNSH principle, making it less compliant overall.
Company 2:
Total score: +7
Strength: Entire score derives from a +7 contribution to climate change adaptation, without any negative impacts on other objectives. This aligns well with the EU taxonomy, as there’s no harm to other objectives.
Company 3:
Total score: +7
Strength: Balanced contributions across multiple objectives (+3 to circular economy, +2 to climate change adaptation, and +2 to pollution prevention and control).
Weakness: While it has a balanced approach, its contributions are less substantial compared to Company 2’s focused and significant improvement in climate change adaptation.
Quiz #1 No.9
Over the last few decades, developed countries have most likely experienced declining:
A. average annual working hours.
B. levels of part-time employment.
C. proportions of employees with higher education.
A. average annual working hours
Explanation:
Over the last few decades, developed countries have experienced a decline in average annual working hours due to a combination of factors, including:
Increased productivity:
Technological advancements and improved work processes have enabled workers to produce more output in less time. This has allowed for shorter working hours without reducing economic output.
Stronger labor protections:
Labor laws in developed countries have increasingly emphasized work-life balance, including regulations on maximum working hours, paid leave, and overtime. These measures have contributed to a reduction in annual working hours.
Cultural shifts:
There has been a growing emphasis on personal well-being, leisure, and time spent with family, leading to a preference for shorter work hours.
Part-time and flexible work:
The rise of part-time employment and flexible work arrangements has also contributed to the decline in average annual working hours.
Why the other options are incorrect:
B. Levels of part-time employment:
Part-time employment has increased, not declined, in many developed countries as more workers seek flexible schedules. This trend is especially prevalent among students, parents, and older workers.
C. Proportions of employees with higher education:
The proportion of employees with higher education has increased, as more individuals pursue advanced degrees to meet the demands of knowledge-based economies.
Quiz #1 No.10
Which of the following trends is most closely associated with environmental trends?
A. Mass migration
B. Digital disruption
C. Increasing inequality
A. Mass migration
Explanation:
Environmental trends, such as climate change, natural disasters, and resource depletion, are closely linked to mass migration. These environmental changes can force people to leave their homes and migrate to other regions or countries, often referred to as climate migration or environmental displacement.
Key Points:
Climate Change and Migration:
Rising sea levels, desertification, extreme weather events, and other climate-related phenomena displace millions of people worldwide. For example:
Coastal communities face threats from flooding and hurricanes.
Droughts and desertification reduce arable land, forcing farmers and their families to relocate.
Environmental Refugees:
The term environmental refugees describes individuals who migrate due to environmental degradation. This trend is expected to increase significantly in the coming decades as climate change accelerates.
Examples of Mass Migration Due to Environmental Factors:
The 2010 Haiti earthquake displaced millions.
Rising sea levels threaten island nations like the Maldives, forcing residents to consider relocation.
Why the other options are incorrect:
B. Digital disruption:
Digital disruption refers to the impact of technological advancements on industries, economies, and societies. While it is a significant trend, it is not directly related to environmental trends.
C. Increasing inequality:
While climate change can exacerbate inequality (e.g., poorer populations are more vulnerable to environmental disasters), inequality as a trend is not primarily associated with environmental issues.
Quiz #1 No.11
Which of the following scenarios best illustrates the concept of a “just” transition?
A. A region transitioning to renewable power prioritizes equipment installations in historically underserved areas.
B. A government pledges a multibillion-dollar fund to employ displaced oil industry workers in safely decommissioning abandoned drill sites.
C. A logistics company builds a new warehouse on the ancestral land of indigenous people and commits to employing a minimum number of indigenous workers.
B. A government pledges a multibillion-dollar fund to employ displaced oil industry workers in safely decommissioning abandoned drill sites.
Explanation:
A “just transition” refers to the process of shifting toward a sustainable, low-carbon economy while ensuring fairness and equity for workers and communities that are most affected by the transition. A just transition emphasizes mitigating the negative social and economic impacts of this shift, particularly for workers in industries like coal, oil, and gas, and ensuring their participation in the new green economy.
Why “B” is correct:
The government fund addresses the displacement of oil industry workers caused by the transition to renewable energy.
It ensures these workers are provided with meaningful employment opportunities (e.g., safely decommissioning drill sites).
This aligns with the principles of a just transition by prioritizing the welfare of workers and communities impacted by the energy transition while contributing to environmental restoration.
Why the other options are incorrect:
A. A region transitioning to renewable power prioritizes equipment installations in historically underserved areas:
While this policy prioritizes equity in renewable power access, it does not specifically address the economic or social impacts on workers or communities displaced by the energy transition. This makes it more about equitable energy distribution than a “just” transition.
C. A logistics company builds a new warehouse on the ancestral land of indigenous people and commits to employing a minimum number of indigenous workers:
This scenario involves a trade-off that may fail to respect indigenous rights (e.g., the exploitation of ancestral lands). While it offers jobs, it is not an example of a “just” transition because it does not prioritize fairness or justice for marginalized communities.
Quiz #2 No.1
Which of the following statements is most accurate? Research supports that a strong company culture of diversity, equity, and inclusion:
A. leads to better decision making.
B. leads to worse investment outcomes.
C. has no impact on investor decision making and investment outcomes.
A. leads to better decision making.
Explanation:
Research consistently shows that a strong company culture of diversity, equity, and inclusion (DEI) leads to better decision-making processes and outcomes. Diverse teams bring a variety of perspectives, experiences, and ideas to the table, which enhances creativity, innovation, and problem-solving.
Supporting Evidence:
Improved Decision Making:
Diverse teams are more likely to consider a broader range of perspectives and challenge assumptions, which leads to more thorough and effective decisions.
Studies have found that teams with greater diversity in gender, ethnicity, and background outperform less diverse teams in solving complex problems.
Better Investment Outcomes:
Companies that prioritize diversity and inclusion tend to have stronger financial performance. For example, research from McKinsey & Company has shown that firms in the top quartile for diversity are more likely to outperform their peers in terms of profitability.
Investors increasingly prioritize ESG (Environmental, Social, and Governance) factors, and a demonstrated commitment to DEI is often viewed positively in these assessments.
Positive Correlation with Innovation:
DEI fosters an environment that encourages innovation, a key factor in long-term business success and investment attractiveness.
Why the other options are incorrect:
B. leads to worse investment outcomes:
There is no evidence to suggest that DEI has a negative impact on investment outcomes. On the contrary, companies with a strong DEI culture often perform better financially and attract investors.
C. has no impact on investor decision making and investment outcomes:
This is inaccurate, as DEI is increasingly considered a critical component of ESG criteria, which directly influences investor decision-making and long-term investment outcomes.
Quiz #2 No.2
Which metric is expected to decrease as countries progress from the low- to middle-income category?
A. Average hours worked
B. Stress-related illnesses
C. “War on talent” between companies
A. Average hours worked
Explanation:
As countries progress from the low- to middle-income category, average hours worked per worker typically decrease. This trend is driven by several factors related to economic development and societal changes:
Why Average Hours Worked Decrease:
Productivity Gains:
Economic development leads to advancements in technology, infrastructure, and education, which improve worker productivity. As workers produce more output in less time, average working hours tend to decline.
Labor Laws and Protections:
As nations develop, they often introduce labor laws that cap working hours, mandate paid time off, and promote work-life balance to protect workers.
Shift to Services and Knowledge-Based Economies:
Low-income countries often rely on agriculture and manufacturing sectors, which involve long working hours. Middle-income countries increasingly transition to service-oriented and knowledge-based economies with shorter, more flexible working hours.
Rising Incomes:
As incomes rise, workers may prioritize leisure and personal time, reducing the need to work excessively long hours to meet basic needs.
Quiz #2 No.3
Investors following Christian faith-based investment strategies are most likely to avoid investments in:
A. family-owned pork producers.
B. companies from the defense sector.
C. financial instruments that pay interest revenues.
B. companies from the defense sector.
Explanation:
Christian faith-based investment strategies often align with ethical, moral, and social principles derived from Christian teachings. These strategies typically involve avoiding investments in industries or activities that contradict Christian values. Here’s a breakdown of the options:
Why “B. companies from the defense sector” is correct:
Many Christian faith-based investors avoid investing in companies involved in the defense sector because it is associated with warfare and activities that may conflict with Christian principles of peace and nonviolence.
Denominations such as the Quakers or Mennonites, in particular, emphasize pacifism and are strongly opposed to war-related industries.
Even broader Christian investment strategies may avoid defense companies to promote peace and reduce harm.
Why the other options are incorrect:
A. family-owned pork producers:
Unlike Islamic finance, which prohibits investing in pork-related industries due to religious dietary laws, most Christian faith-based investment strategies do not have restrictions on investing in pork production. Pork is not prohibited in Christian teachings.
C. financial instruments that pay interest revenues:
Avoiding interest-based investments is a principle of Islamic finance, not typically a focus of Christian faith-based investing. While some Christian groups, such as those following strict interpretations of Biblical teachings, may have concerns about usury (excessive interest), this is generally not a widespread restriction.
Quiz #2 No.4
Which of the following are considered social megatrends?
A. Human rights, health and safety, and employee relations
B. Automation, globalization, and longevity
C. Natural capital, biodiversity, and climate change adaptation
B. Automation, globalization, and longevity
Explanation:
Social megatrends refer to large-scale, transformative changes that significantly shape societies, economies, and cultures over a long period of time. These trends influence how people live, work, and interact globally. Among the options provided, automation, globalization, and longevity are considered social megatrends because they represent major forces reshaping human societies.
Why B is correct:
Automation:
The rise of automation and artificial intelligence is transforming industries, creating new jobs while displacing others, and reshaping the global labor market.
It has profound implications for education, skill development, and social structures.
Globalization:
Globalization has interconnected countries through trade, technology, and culture, affecting everything from economies to migration patterns.
It influences how societies interact and adapt to global challenges.
Longevity:
Increasing life expectancy and aging populations are reshaping healthcare systems, pensions, and workforce dynamics.
This trend is particularly significant in developed and middle-income countries.
Why the other options are incorrect:
A. Human rights, health and safety, and employee relations:
While these are important aspects of social responsibility and governance, they are not typically classified as megatrends. They are more specific social issues or principles rather than broad, long-term transformative trends.
C. Natural capital, biodiversity, and climate change adaptation:
These are environmental megatrends, not social megatrends. They relate to global ecological and sustainability challenges rather than societal shifts.
Quiz #2 No.5
Aggressive tax optimization strategies by companies are most closely related to the social megatrend of:
公司採取的積極稅收優化策略與以下社會大趨勢最密切相關：
A. globalization.
B. inequality and wealth creation.
C. changes to work, leisure time, and education.
B. inequality and wealth creation
Explanation:
Aggressive tax optimization strategies by companies are closely linked to the social megatrend of inequality and wealth creation. These strategies often enable multinational corporations and wealthy individuals to reduce their tax liabilities, sometimes at the expense of public revenues. This can exacerbate economic inequality and influence wealth distribution on both national and global scales.
公司採取的積極稅務優化策略與社會不平等和財富創造的大趨勢密切相關。這些策略通常使跨國公司和富裕個人能夠減少稅負，有時會以公共收入為代價。這可能會加劇經濟不平等，並影響國家和全球範圍內的財富分配。
Why B. inequality and wealth creation is correct:
Impact on Inequality:
When companies use aggressive tax strategies, they contribute less to public funds that are essential for social services like education, healthcare, and infrastructure. This can disproportionately affect low- and middle-income populations who rely more on these services.
The concentration of wealth in corporations and among wealthy individuals, coupled with reduced tax obligations, widens the gap between the rich and the poor.
Wealth Creation for Corporations:
当企业采用激进的税务策略时，它们对教育、医疗和基础设施等社会服务至关重要的公共资金贡献较少。这可能会对更依赖这些服务的低收入和中等收入人群产生不成比例的影响。
财富在企业和富人手中集中，加上税收负担减轻，扩大了贫富差距。
These strategies often allow corporations to retain more profits, which are then distributed to shareholders or reinvested, further consolidating wealth among a smaller group of people.
Public Perception:
Aggressive tax optimization is often criticized as unfair, especially in light of rising inequality, as it shifts the tax burden onto smaller companies and individuals who cannot take advantage of such strategies.
Why the other options are incorrect:
A. globalization:
While globalization has facilitated tax optimization by enabling companies to operate across multiple jurisdictions and exploit tax havens, aggressive tax strategies are more directly tied to inequality and wealth creation than globalization as a megatrend.
C. changes to work, leisure time, and education:
This megatrend focuses on societal shifts in how people work, spend their leisure time, and pursue education. It is not directly related to corporate tax strategies.
Quiz #2 No.6
Which of the following standards gives guidance on the financially material topics within industries?
A. Sustainability Accounting Standards Board (SASB) Standards
B. Global Reporting Initiative (GRI) Standards
C. International Labour Organisation (ILO) Standards
A. Sustainability Accounting Standards Board (SASB) Standards
Explanation:
The Sustainability Accounting Standards Board (SASB) Standards provide guidance on financially material topics within industries. These standards are specifically designed to help companies identify and disclose sustainability issues that are most likely to impact their financial performance. SASB’s industry-specific approach ensures that companies focus on material issues relevant to their sector.
Why A. SASB Standards is correct:
Focus on Financial Materiality:
SASB Standards focus on identifying environmental, social, and governance (ESG) issues that are financially material—those that could affect a company’s financial condition, operating performance, or market valuation.
The standards provide specific guidance for 77 industries, ensuring tailored relevance.
Investor-Focused:
SASB is designed to meet the needs of investors and other financial stakeholders, helping them understand how sustainability issues impact financial performance.
Industry-Specific:
SASB’s industry-specific standards provide companies with a clear framework for disclosing material ESG factors most relevant to their industry.
Quiz #2 No.7
Which of the following provides an example of an internal and an external social factor?
A. Internal: biodiversity; external: product liability
B. Internal: labor rights; external: social opportunities
C. Internal: animal welfare; external: employee relations
B. Internal: labor rights; external: social opportunities
Explanation:
Social factors in the context of ESG (Environmental, Social, and Governance) considerations can be classified as internal or external based on whether they relate to a company’s internal operations or its external interactions with society.
Why B is correct:
Internal social factor: Labor rights:
Labor rights are an internal factor because they pertain to how a company treats its employees, including issues like fair wages, workplace safety, and freedom of association. These are directly tied to the company’s internal operations and workforce management.
External social factor: Social opportunities:
Social opportunities are an external factor because they involve how a company interacts with the broader society, such as contributing to community development, education programs, or improving access to essential services. These are outward-facing and affect the company’s relationship with society.
Why the other options are incorrect:
A. Internal: biodiversity; external: product liability:
Biodiversity is an environmental factor, not a social factor, and is generally external rather than internal. Product liability, while external, is more of a governance or operational risk issue than a social factor.
C. Internal: animal welfare; external: employee relations:
Animal welfare is typically categorized as an environmental factor rather than a social factor. Employee relations are an internal social factor, not external, as they pertain to how a company manages its workforce.
Quiz #2 No.8
Which of the following is most likely a concern for rural populations?
A. Heat islands
B. Job opportunities
C. Non-communicable diseases associated with lifestyle
B. Job opportunities
Explanation:
Rural populations face unique challenges, and job opportunities is one of the most pressing concerns for these communities. Rural areas often have fewer employment opportunities compared to urban centers, and this can lead to economic stagnation, outmigration, and reduced quality of life.
Why B. Job opportunities is correct:
Economic challenges in rural areas:
Rural regions often lack the economic diversity of urban areas, which can limit the availability of jobs. Many rural economies are heavily reliant on agriculture, mining, or other primary industries, which may not provide stable or sufficient employment.
Younger generations in rural areas often migrate to urban centers in search of better job opportunities, leading to population decline and aging communities.
Access to industries:
Many industries and sectors are concentrated in urban areas, leaving rural populations with fewer options for employment.
Why the other options are incorrect:
A. Heat islands:
Heat islands are a phenomenon where urban areas experience higher temperatures due to buildings, asphalt, and limited vegetation. This is primarily an urban concern, not a rural one.
C. Non-communicable diseases associated with lifestyle:
While non-communicable diseases (e.g., obesity, diabetes) can occur in rural areas, they are more commonly associated with urban and suburban populations due to sedentary lifestyles and access to processed foods. Rural populations typically face more pressing issues like access to healthcare and employment.
Quiz #2 No.9
Why is a (social) materiality assessment important?
A. It is standard procedure in investment analysis, which makes it an important tick-box exercise.
B. Not all countries, sectors, and companies are affected equally by the different social megatrends and social factors.
C. A social materiality assessment is required by law in many jurisdictions.
B. Not all countries, sectors, and companies are affected equally by the different social megatrends and social factors.
Explanation:
A social materiality assessment is crucial because it helps identify and prioritize the social factors and megatrends that are most relevant or impactful to a specific country, sector, or company. Social issues such as labor rights, diversity, inequality, and community welfare do not have the same level of importance or impact across industries and geographies, making this assessment essential for tailoring strategies and decision-making.
Why B is correct:
Differentiated Impact of Social Factors:
Social factors (e.g., labor rights, supply chain practices, community engagement) and megatrends (e.g., globalization, demographic shifts, automation) affect industries and regions differently. For example:
Developing countries may face challenges like poor labor conditions, while developed countries may focus on diversity and inclusion.
The technology sector may prioritize digital inclusion, while the agricultural sector is more concerned with migrant labor rights.
Resource Allocation:
A materiality assessment ensures that resources are allocated to address the most pressing and relevant social issues, avoiding a “one-size-fits-all” approach.
Strategic Decision-Making:
Understanding material social issues helps companies and investors integrate these considerations into their strategies, risk management, and reporting.
Why the other options are incorrect:
A. It is standard procedure in investment analysis, which makes it an important tick-box exercise:
A social materiality assessment goes beyond being a mere procedural exercise. It is a critical process for driving meaningful insights and actions related to social issues. Treating it as a “tick-box” exercise undermines its importance.
C. A social materiality assessment is required by law in many jurisdictions:
While some jurisdictions may require aspects of materiality assessments (e.g., the EU’s Corporate Sustainability Reporting Directive), a social materiality assessment specifically is not legally mandated in most places. Instead, it is primarily driven by best practices and stakeholder expectations.
Quiz #2 No.10
Which of the following is one of the pillars of the United Nations Guiding Principles on Business and Human Rights (UNGPs)?
A. Equal remuneration
B. Access to remedy for victims of business-related abuses
C. Freedom of association and protection of the right to organize
B. Access to remedy for victims of business-related abuses
Explanation:
The United Nations Guiding Principles on Business and Human Rights (UNGPs) are built on three pillars that outline the responsibilities of states and businesses to respect, protect, and remedy human rights in the context of business operations.
The Three Pillars of the UNGPs:
The State Duty to Protect Human Rights:
States are required to protect against human rights abuses by third parties, including businesses, through appropriate laws, policies, and enforcement.
The Corporate Responsibility to Respect Human Rights:
Businesses must avoid infringing on human rights and address adverse impacts with which they are involved, including through due diligence processes.
Access to Remedy:
Victims of business-related human rights abuses must have access to effective remedy through judicial, administrative, or other means. This is the pillar referenced in option B, which focuses on ensuring justice and redress for affected individuals.
Why B is correct:
Ensuring access to remedy for victims of business-related abuses is a core pillar of the UNGPs. It emphasizes the importance of providing affected individuals with mechanisms to seek justice, hold businesses accountable, and receive compensation or other forms of redress for harm caused.
Why the other options are incorrect:
A. Equal remuneration:
While equal remuneration (equal pay for equal work) is a fundamental labor right recognized by the International Labour Organization (ILO), it is not explicitly one of the pillars of the UNGPs. It is a specific right that falls under broader human rights frameworks.
C. Freedom of association and protection of the right to organize:
These are important labor rights recognized by the ILO and other human rights frameworks, but they are not one of the three pillars of the UNGPs. They fall under the broader responsibility to respect human rights but are not explicitly mentioned as a foundational pillar.
Quiz #2 No.11
Which of the following best describes the impact of an aging population on a country’s economy?
A. Higher tax revenues for the government
B. Lower consumer goods consumption in the country
C. Lower accumulated savings per person for older people
B. Lower consumer goods consumption in the country
Explanation:
An aging population has significant economic implications, and lower consumer goods consumption is one of the key impacts. As the proportion of older individuals in a population increases, their spending patterns shift away from consumer goods (e.g., clothing, electronics, and luxury items) to essential services like healthcare and retirement-related expenses.
Why B. Lower consumer goods consumption in the country is correct:
Changes in Spending Patterns:
Older individuals typically spend less on discretionary items and consumer goods compared to younger, working-age populations.
Spending shifts toward healthcare, housing, and services, which may reduce overall demand for consumer goods in the economy.
Reduced Workforce and Lower Incomes:
As people retire, their disposable income often decreases, which can further reduce their consumption of consumer goods. This trend impacts economic growth in sectors dependent on younger, active consumers.
Why the other options are incorrect:
A. Higher tax revenues for the government:
An aging population typically leads to lower tax revenues, not higher, because:
Retired individuals contribute less to income taxes.
Governments face increased expenditures for pensions, healthcare, and social welfare, which can strain public finances.
C. Lower accumulated savings per person for older people:
Older individuals generally have higher accumulated savings, as they save throughout their working lives. However, they may draw down on these savings during retirement, but this does not imply they have lower savings overall compared to younger age groups.
Quiz #3 No.1
Which of the following is least likely to be associated with the automation and artificial intelligence (AI) megatrends?
A. Employment losses in the garment sector within developed countries
B. Employment gains in the IT sector
C. Future employment losses in the transportation sector
A. Employment losses in the garment sector within developed countries
Explanation:
The automation and artificial intelligence (AI) megatrends are strongly associated with changes in employment patterns across industries, particularly due to advancements in technology and the adoption of automated systems. However, the garment sector in developed countries has already experienced significant job losses over past decades due to outsourcing and globalization, rather than automation or AI. Most garment production has been relocated to developing countries where labor costs are lower, making automation and AI less relevant to this specific trend in developed countries.
Why A is least likely:
The garment sector in developed countries has already undergone a major decline due to offshoring and global supply chain shifts, rather than automation and AI.
While automation (e.g., sewing robots) is affecting the garment sector globally, the developed world has minimal garment manufacturing left to further automate, so job losses in this sector are not strongly linked to the automation and AI megatrends.
Why the other options are associated with automation and AI:
B. Employment gains in the IT sector:
Automation and AI are driving rapid growth in the IT sector, with increased demand for skills in data science, AI development, machine learning, and cybersecurity. This trend is directly linked to technological advancements.
C. Future employment losses in the transportation sector:
Automation, such as self-driving vehicles, is expected to disrupt the transportation sector, leading to significant job losses for drivers in trucking, taxis, and delivery services. This is a well-documented impact of the automation and AI megatrends.
Quiz #3 No.2
What is the FAIRR initiative?
A. It is a collaboration that aims to reach a just transition.
B. It is an initiative to stimulate fair trade.
C. It is an initiative that focuses on the increased prevalence of antimicrobial resistance. 这是一个专注于抗微生物药物耐药性日益流行的倡议。
C. It is an initiative that focuses on the increased prevalence of antimicrobial resistance.
Explanation:
The FAIRR Initiative (Farm Animal Investment Risk & Return) is a global investor network that focuses on ESG risks and opportunities related to intensive animal farming. One of its key areas of focus is the increased prevalence of antimicrobial resistance (AMR), which is linked to the overuse of antibiotics in livestock farming. This issue poses significant risks to public health, as well as financial and reputational risks to companies involved in animal agriculture.
FAIRR 倡議（農場動物投資風險與回報）是一個全球投資者網絡，專注於與集約化動物養殖相關的環境、社會和治理（ESG）風險與機遇。其重點關注領域之一是抗微生物藥物耐藥性（AMR）的日益蔓延，這與畜牧養殖中抗生素的過度使用密切相關。這一問題對公共衛生構成重大風險，同時也給從事動物農業的公司帶來財務和聲譽風險。
Why C is correct:
Focus on Antimicrobial Resistance (AMR):
FAIRR highlights how the excessive use of antibiotics in factory farming contributes to the rise of AMR, which is a growing global health crisis.
AMR reduces the effectiveness of antibiotics, making it harder to treat infections in humans and animals.
Broader ESG Focus:
FAIRR 强调，工厂化养殖中抗生素的过度使用助长了抗药性（AMR）的蔓延，而抗药性已成为日益严重的全球公共卫生危机。抗药性会降低抗生素的疗效，使人类和动物感染疾病后更难治愈。
更广泛的 ESG 关注点：
FAIRR addresses other ESG issues related to intensive animal farming, such as climate change, deforestation, water scarcity, and animal welfare. However, AMR is a critical part of its agenda due to its far-reaching health and economic implications.
FAIRR 还关注与集约化畜牧业相关的其他 ESG 问题，例如气候变化、森林砍伐、水资源短缺和动物福利。然而，由于其深远的健康和经济影响，抗药性（AMR）是其议程中的关键部分。
Why the other options are incorrect:
A. It is a collaboration that aims to reach a just transition:
While FAIRR promotes sustainable farming practices, its primary focus is not on the concept of a “just transition,” which typically relates to moving toward a low-carbon economy in a way that ensures fairness for workers and communities.
B. It is an initiative to stimulate fair trade:
FAIRR is not focused on fair trade, which is a movement aimed at ensuring equitable trade practices, particularly for producers in developing countries.
