Exam Sustainable-Investing Topic 1 Question 423 Discussion

Actual exam question for CFA Institute's Sustainable-Investing exam
Question #: 423
Topic #: 1
The management gap best describes a risk that:

Suggested Answer: C Vote an answer

Themanagement gaprefers torisks that are known but not yet actively managed. This could includeESG risks that companies acknowledge but have not integrated into their governance or risk management processes.
* Unrated credit positions (B) are a separate riskrelated to credit ratings.
* All risks (A) can technically be managed, but some may beneglected due to lack of prioritization or resources.
References:
CFA Institute ESG Risk Management Guide
MSCI ESG Credit Risk Research
Principles for Responsible Investment (PRI) ESG Governance Framework
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by Evelyn at Jun 25, 2025, 06:50 PM

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