CFA Level I · CFA Level I Exam · Company Analysis: Past, Present, and Future
An analyst is assessing a manufacturer's ESG risks. Which of the following is most likely classified as a social factor?
Supply-chain labor practices are a social factor because they concern how the company treats workers and affects people and communities. Carbon emissions intensity is an environmental factor, and board compensation structure is a governance factor under the standard ESG classification.
- ASupply-chain labor practicesCorrect
- BCarbon emissions intensity
- CBoard compensation structure
Explanation
Social factors cover relationships with employees, suppliers, customers and communities, including labor practices. Carbon emissions are environmental, and board compensation is a governance matter.
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