Certified Environmental Social and Governance Analyst (CESGA) EFFAS Practice Test

Which topic identifies the relative winners and losers in every sector?

1. Insurance.

2. Fair taxation.

3. Banking.

4. Agriculture.

The correct answer is: Fair taxation.

Fair taxation is a concept that addresses how taxes are assessed and applied in a way that can impact different sectors and their stakeholders. The idea behind fair taxation is that it aims to create a level playing field in the economy, enabling various sectors to experience equitable contributions toward public goods and services. This topic highlights disparities in how taxes can benefit or burden different sectors, as well as the effects of tax policies and regulations on economic activity and competition. In any given sector, fair taxation can reveal which entities thrive due to favorable tax conditions, and which may struggle due to higher tax burdens or less favorable tax structures. Because taxes can influence business decisions—such as location, investment, and pricing strategies—understanding the dynamics of fair taxation allows analysts and stakeholders to identify potential winners and losers across different sectors. This makes it a critical focus for evaluating ESG (Environmental, Social, and Governance) factors, as tax policies can directly impact social equity and corporate responsibility.