CSEET · Economic and Business Environment · Environmental Governance
Which of the following is correctly classified under the 'Environmental' pillar of ESG, as opposed to the 'Social' or 'Governance' pillar?
Greenhouse gas emissions and water consumption fall under the Environmental pillar because they measure the firm's direct impact on natural resources. Employee safety and diversity are social matters, while audit committee independence and related party policy are governance matters.
- AIndependence of the board's audit committee
- BWorkplace safety record and employee diversity
- CGreenhouse gas emissions and water consumption of operationsCorrect
- DPolicy on related party transactions
Explanation
The environmental pillar covers a firm's impact on nature: emissions, energy, water, waste and biodiversity. Workplace safety and diversity belong to the social pillar. Audit committee independence and related party policy belong to governance.
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