CFA Institute Sustainable-Investing Question Answer
Human rights violations most likely occur:
Among the first-tier suppliers of publicly traded companies.
Deep within the supply chains of publicly traded companies.
Among the second-tier suppliers of publicly traded companies.
Human rights violations are most prevalent deep within supply chains, where oversight is weakest.
Why B (Deep in supply chains) is correct:
First-tier suppliers are often audited, while deeper tiers have less transparency.
Forced labor, child labor, and unsafe working conditions are more common in third-tier and informal supply chains.
Example: Textile industry abuses in subcontracted factories.
Why not A or C?
A is incorrect—first-tier suppliers face more scrutiny from brands.
C is incorrect—violations are even more likely in third-tier suppliers and beyond.
TESTED 01 Jan 2026
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