Sustainability and Climate Risk

Here you have the best GARP SCR practice exam questions

You have 61 total questions to study from
Each page has 5 questions, making a total of 13 pages
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This questions were last updated on November 14, 2024

Question 1 of 61

A climate scientist develops a presentation on modern climate change for a group of policymakers.

What observation does the scientist include in the presentation that provides evidence of human attribution to current climate change?

Atmospheric CO2 with isotopes consistent with fossil fuel emissions have increased since the mid-20th century.

Glacial ice records indicate atmospheric CO2 increased by 135 parts per thousand since the Industrial Revolution.

In the past 200 years, CO2 is responsible for most negative radiative forcing.

In the past 100 years, the atmospheric lifetime of CO2 attributed to energy use increased.

Correct Answer: A

Atmospheric CO2 with isotopes consistent with fossil fuel emissions have increased since the mid-20th century. This observation directly links the rise in CO2 levels to the burning of fossil fuels, which is a human activity. This provides strong evidence of human attribution to current climate change.

Question 2 of 61

The risk team at an agricultural company in Easter Europe evaluates crop yield production performance. The evaluation reveals high temperature and water shortages will likely harm crop production, and current company insurance will not mitigate this exposure. The team recommends increasing coverage by purchasing an additional insurance policy that includes area yield protection.

According to the COSO ERM framework, which risk response strategy did the team recommend?

Pursuit

Sharing

Reduction

Acceptance

Correct Answer: B

The risk team recommended a strategy of sharing the risk. By purchasing an additional insurance policy that includes area yield protection, the company is transferring a portion of the risk associated with high temperatures and water shortages to the insurance provider. This corresponds to the 'Sharing' risk response strategy in the COSO ERM framework, as insurance is a common method of risk sharing.

Question 3 of 61

A city planning commissioner consults with climate scientists to assess the impact of sea level rise on strategic infrastructure projects. The scientists discuss several climate model projections and indicate sea level rise has a fundamental relationship to GHG emissions, regardless of a specific warming scenario.

How should the scientists describe this relationship?

Sea level rises proportionally faster than GHG emissions.

Sea level rise lags GHG emissions.

Sea level rises in response to ocean acidification.

Sea level rise will cease once global emissions peak.

Correct Answer: B

Sea level rise lags GHG emissions. This is because greenhouse gas emissions contribute to global warming, which in turn leads to the melting of polar ice caps and the thermal expansion of seawater. However, these processes take time, so the rise in sea levels occurs after the increase in GHG emissions.

Question 4 of 61

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?

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.

Correct Answer: C

In terms of a 10-year strategy, acute hazards refer to sudden, extreme events like hurricanes, which can cause immediate and severe impacts on operations. Chronic hazards involve gradual changes over time, such as sea level rise. Option C correctly distinguishes between these two types of hazards: models for hurricane damage (acute) are generally more reliable and agreed upon than those for sea level rise (chronic), appropriately emphasizing the consideration of both short-term and long-term impacts in the company's strategy. Therefore, Option C provides the most accurate description relevant to the question.

Question 5 of 61

To improve sustainability, a railroad and transportation services company will revitalize its rail network by installing an operating system that reduces idle time. A reduction in idle time will decrease GHG emissions. To finance this plan, the company will issue green bonds beginning in 2024. The company sustainability director develops sustainability objectives and eligibility criteria to communicate to investors.

The director is fulfilling which core component of the Green Bond Principles?

Process for project evaluation and selection

Reporting

Management of proceeds

Use of proceeds

Correct Answer: A

The core component of the Green Bond Principles being fulfilled by the sustainability director is the 'Process for project evaluation and selection'. This involves developing sustainability objectives and eligibility criteria for green projects and ensuring these are communicated to investors. By setting these criteria, the director ensures that the projects financed by the green bonds will meet the necessary environmental sustainability goals.