CFA Level I · CFA Level I Exam · Investors and Other Stakeholders
Which of the following is the best description of the "S" in ESG factors as applied by investors analyzing a corporate issuer?
The social factor in ESG covers employee relations, health and safety, and community impact. It concerns how a company treats people affected by its operations. Board structure and voting rights are governance matters, while share issuance and listing are capital market choices, not social considerations.
- AShareholder voting rights and board structure
- BEmployee relations, health and safety, and community impactCorrect
- CShare issuance policy and stock exchange listing
Explanation
The social factor covers a company's relationships with employees, customers, suppliers and communities, including health and safety and labor practices. Board structure and voting rights belong to governance, and share issuance and listing are not ESG categories.
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