Environmental Factors

Fenwick Cement emits 0.6 tonnes of CO2 per tonne of cement. The carbon price it pays rises by EUR 50 per tonne of CO2, and competition lets it pass 70% of the extra cost on to customers through higher prices. By how much does its profit per tonne of cement fall?

Alder Chemicals emits 480,000 tonnes of CO2e on revenue of USD 1,600 million. Birch Chemicals emits 210,000 tonnes on revenue of USD 600 million. Measured as tonnes of CO2e per USD million of revenue, which statement is correct?

A wine producer in southern Europe finds that average summer temperatures in its region have risen steadily over two decades, so the grape varieties it grows are becoming less viable. Using the TCFD's classification of climate-related risks, this is BEST described as:

Harlow Foods processes chicken in Europe and owns no farmland. Its main input is feed made with soy bought through traders from regions where forest is being cleared for farming. An analyst concludes that deforestation is not material for Harlow because it clears no land itself. What is the main weakness in this conclusion?

A long drought lowers a major European river. Hydropower output falls, thermal power stations on the river cut output because cooling water is too warm, and barges carrying coal and chemicals can load only part of their cargo. For an investor holding utilities, chemical makers and shipping firms in the region, what does this MOST clearly show?

Under the EU Emissions Trading System, a paper mill receives some allowances free, buys the rest at auction and must surrender enough allowances each year to cover its emissions. If it installs more efficient equipment and ends the year holding more allowances than its emissions require, what can it do with the surplus?

Hollins Bank lends to manufacturers and power companies. Under the GHG Protocol Scope 3 Standard, in which category should it report the emissions linked to its loans?

Over three years, Corvid Packaging cut its emissions per tonne of product by 20% while its output rose by 40%. Its press release says it is cutting its climate impact. What happened to Corvid's absolute emissions over the period?

An investor holds coastal property and shares in a coal miner and tests both against the NGFS 'Current Policies' and 'Net Zero 2050' scenarios. The NGFS describes Current Policies as leading to high physical risks, and Net Zero 2050 as minimising physical risks while bringing transition costs. Which pairing is BEST?

A risk team estimates future flood losses on a property portfolio by projecting forward the average of the last 40 years of loss data. The team argues that a long history makes the estimate reliable. Why might this approach understate climate-related physical risk?

The trustees of the Calder Pension Scheme say the Paris Agreement concerns only governments and says nothing about how capital is allocated. Which aim in Article 2 of the agreement BEST answers them?

An analyst writes that under the Paris Agreement every country is legally bound to meet an emissions target that the treaty itself sets. Which statement BEST corrects this?

A pension fund's climate policy refers to the long-term temperature goal of the Paris Agreement. Which statement BEST describes that goal as set out in Article 2?

Penrose Retail buys renewable energy certificates covering all its power use and reports scope 2 emissions of zero under the market-based method. Its stores draw power from grids that are mostly fossil-fuelled. Under the GHG Protocol Scope 2 Guidance, what else should Penrose report?

For which of the following companies are emissions from the use of its sold products MOST likely to be far larger than its own scope 1 and scope 2 emissions combined?

A low-lying island state earns about 40% of its GDP from tourism, has little industry and emits very little greenhouse gas. Which environmental risk is MOST material to the credit quality of its government bonds?

An oil company's valuation assumes it will produce and sell all of its proven reserves over the next 30 years. If governments tighten climate policy sharply, part of those reserves may never be produced. Which term BEST describes those reserves, and what is the likely effect?

A government wants to cut industrial emissions and is choosing between a carbon tax and a cap and trade scheme. Its main concern is certainty about the total tonnes emitted, and it accepts that the price per tonne may swing. Which design BEST fits this aim?

Falling battery costs make electric vans cheaper to run than diesel vans, and a maker of diesel fuel-injection parts sees orders fall even though no new law has been passed. Under the TCFD's classification, which risk is the parts maker MAINLY facing?

An index holds a soft drinks maker with bottling plants in dry regions and an online travel booking company. For which is water scarcity MOST likely to be financially material, and why?