GARP SCR Actual Tests : Sustainability and Climate Risk

The GARP Sustainability and Climate Risk exam has a reputation for tripping up even experienced professionals. Actual4test built its SCR practice test around 113 expert-verified questions so you can walk in knowing what to expect.

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GARP Sustainability and Climate Risk Sample Questions:

Question 1

An oil and gas company aligns strategy and resiliency planning with long-term global climate goals. After conducting a feasibility study, a company climate risk analyst recommends incorporating IEA scenarios into company strategy development. How might the use of IEA reference scenarios improve company strategy planning?

A. IEA scenarios guide short-term efforts to reduce operational costs and optimize energy usage.
B. IEA scenarios consider technological advancements in energy intensive sectors to forecast short-term market trends.
C. IEA scenarios incorporate long-term energy and climate projections to meet sector-specific energy transition goals.
D. IEA scenarios provide detailed projections of future climate impacts that will inform mitigation strategies primarily for physical risks.

Question 2

The Commissioners of Insurance for a state in the western United States recommends all insurers now report annually on climate change, using TCFD guidance.
Which of the following sectors do the commissioners correctly identify as encompassing the full scope of the TCFD recommendations?

A. Energy, transportation, materials and buildings, agriculture, land and forestry companies
B. Asset managers and owners, endowments, foundations, and additional financial sector representatives
C. Institutional Investors Group-based benchmarking and GRI-derived data on climate change
D. Asset managers and owners, endowments, foundations, and additional financial and non-financial organizations

Question 3

An insurance firm announces it will adopt sustainable practices. To inform sustainable strategy, a company risk analyst researches climate risk. The analyst reviews how climate risk manifests as financial risk through effects on microeconomic company-level risks on various types of companies and institutions. The analyst also identifies possible opportunities resulting from climate risk. Risks and opportunities are presented to senior management.
Which of the following does the analyst cite as an example of how climate risk affects liquidity risk?

A. A company's high-emissions factory is hit with a higher carbon tax that results in asset stranding, which causes the company to have less collateral to use to secure funding.
B. A company's warehouse that is damaged by a tornado causes business interruption that results in loss of revenues and profits, which weakens the company's ability to repay loans.
C. A bank's customers withdraw deposits and draw on credit lines to finance cash-flow needed for recovery after damaging flooding, which increases loan-to-deposit ratios.
D. A mining company that extracts lithium for lithium-ion batteries benefits from higher commodity prices, which increases revenue and profits.

Question 4

A risk consultant begins an engagement for a development agency. The engagement focuses on identifying policies that address climate change impacts. The consultant drafts an action plan that incorporates a roadmap of effective climate policies to present to senior directors at a strategic meeting. The plan includes an introductory summary of the backdrop and effectiveness of historical and current climate policies.
How should the consultant describe the context of climate policy evolution?

A. The first attempts to create international climate policies and accords focused on emissions reductions occurred in the 1970s, as anthropogenic GHG emissions were globally recognized as fact by scientists.
B. Evidence from the past two decades has accumulated that warming levels will lead to tipping points, supporting an international consensus and policies around a goal of limiting warming to 2.5°C.
C. After the World Climate Summit, global climate policy legally required countries responsible for the greatest share of cumulative emissions to cut back emissions the most.
D. As global mean annual temperatures rose significantly in the 1980s, scientific consensus around human influence on climate solidified, leading to the formation of the IPCC.

Question 5

A solar panel manufacturing company for renewable energy systems makes a 2040 net-zero commitment. The company sustainability director references the COSO ERM framework to inform the company's long-term growth strategy. Which approach will the director most likely use to effectively assess the impact of transition risk on the business strategy?

A. Use time horizon to evaluate how an increased frequency of natural disasters impacts the company supply chain.
B. Conduct a materiality assessment to identify the relative importance of various climate risk drivers.
C. Conduct a SWOT analysis to assess the relative importance of climate risk drivers.
D. Use impact and dependency mapping to compare climate opportunities and threats.

Solutions: