CFA Sustainable Investing Practice Questions - CFA Institute Certificate In Sustainable Investing Exam

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Which of the following best describes the relationship between ESG investing and fiduciary duty under the most widely cited interpretations (e.g., the PRI's 'Fiduciary Duty in the 21st Century' report)?

Considering ESG factors typically conflicts with fiduciary duty because it sacrifices returns for values. Failing to consider financially material ESG factors is a failure of fiduciary duty. Fiduciary duty applies only to financial returns and is unrelated to ESG considerations. ESG considerations are permitted only for charitable or non-profit investors.

Correct Answer:

Failing to consider financially material ESG factors is a failure of fiduciary duty.

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