Which of the following is not one of McKinsey's proposed dimensions of investing for the purposes of applying sustainable investing practices?

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BlackTom AI · Accepted Answer

To approach this question, I will evaluate each proposed dimension against McKinsey’s framework for sustainable investing practices.
Option 1: 'investment beliefs and strategy' — This sounds like a core dimension in many investment frameworks, including McKinsey’s approach, where establishing clear beliefs, objectives, and strategic choices guides sustainable investment decisions. It aligns with the idea of embedding sustainability into the overall strategy and investment thesis.
Option 2: 'performance management' — Performance management typically involves monitoring, measuring, and optimizing outcomes, which is a common dimension when implementing sustainability programs in investing. It covers how you track ESG or sustainability performance and adjust actions accordingly, fitting well with McKinsey-like frameworks.
Option 3: 'regulatory and policy environment' — This phrase describes external conditions that influence investing (laws, regulations, policy signals). While highly relevant to sustainable investing in practice, it is generally considered an external context rather than a dimension or component that an organization actively manages within its own investing framework. In many McKinsey-type models, the internal dimensions are things like beliefs/strategy, governance, risk/opportunity management, and performance, with the regulatory context treated as outside influence rather than a dimension you invest in.

Summarizing the distinctions: the first two options describe internal, actionable components that organizations typically control and implement as part of their sustainable investing framework. The third option describes an external environment that shapes decisions but is not usually framed as an internal dimension to be invested in within the McKinsey construct. Therefore, option 3 ('regulatory and policy environment') stands out as the one not traditionally listed as a core dimension in McKinsey’s sustainable investing dimension set.

FINA3401.13791.202610 Practice Chapter 9 Quiz

Which of the following is not one of McKinsey's proposed dimensions of investing for the purposes of applying sustainable investing practices?

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