Certified Environmental Social and Governance Analyst (CESGA) EFFAS Practice Test

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The metrics and targets used to assess and manage relevant climate-related risks and opportunities are one of the core elements of...

GRI Standards.
TCFD Recommendations.
SASB Standards.
The Directive 2014/95/EU.

The correct answer is: TCFD Recommendations.

The metrics and targets used to assess and manage relevant climate-related risks and opportunities are indeed a core element of the Task Force on Climate-related Financial Disclosures (TCFD) Recommendations. The TCFD provides a framework specifically designed for companies to disclose climate-related financial risks and opportunities in a consistent and comparable manner. This includes guidance on disclosing metrics and targets, which helps organizations understand their exposure to climate-related risks, measure their performance over time, and set goals for future improvement, thereby enhancing transparency and accountability. The emphasis on metrics and targets is critical for stakeholders, including investors, as it allows them to evaluate how well a company is positioned to address climate risks and capitalize on climate opportunities. This approach fosters a better understanding of the financial implications tied to climate change, aligning with the broader goals of sustainability and responsible investing.