CFA Institute Sustainable-Investing Question Answer
Engagement is best described as a dialogue:
A.
To inform incremental buy/hold/sell decisions
B.
With a specific and targeted objective to achieve change
C.
To understand a company’s stakeholders and its performance
The Answer Is:
B
This question includes an explanation.
Explanation:
Engagement is a dialogue with a specific and targeted objective to achieve change. This form of active ownership allows investors to influence companies' practices, particularly regarding their ESG risks and opportunities. The goal is to improve long-term shareholder value and drive positive change within the company.ESG Reference: Chapter 6, Page 274 - Engagement and Stewardship in the ESG textbook.
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