MSCI Inc. has launched eight new indices to help investors seeking to tackle climate change holistically by reducing both their transition and physical risks, identifying green opportunities, and aligning their investment strategies with the 1.5-degree warming scenario as targeted by the Paris Agreement.
Building on the company’s existing suite of climate indices, the MSCI Climate Paris Aligned Index Suite includes climate data from MSCI’s Climate Value-at-Risk (Climate VaR) tool, scope 3 emissions data, and green revenues.
The indices not only incorporate the Task Force on Climate-related Financial Disclosures (TCFD) recommendations but are designed to exceed the minimum standards of the EU Paris Aligned Benchmark designation, MSCI says in a statement.
Remy Briand, head of ESG at MSCI, notes: “Climate risks, whether physical or related to the transition to a lower carbon economy, are changing the risk-return profile of companies and industries. Extreme weather events pose new risks to companies’ assets, while carbon-intensive industries are being forced to undergo transformational change.
“MSCI has been providing investors with low carbon benchmarks for several years. Now, some of these investors are looking to deploy a climate strategy that goes beyond reducing carbon intensity.”
Diana Tidd, head of index at MSCI, adds: “We have witnessed tremendous interest in ESG and climate indexes over the past 18 months and continue to see fast adoption. As end-investor awareness and stakeholder pressure rise, institutional investors increasingly want to invest to affect more systemic, global change beyond the company or portfolio level.”
The MSCI Climate Paris Aligned Index Suite forms part of a suite of MSCI climate indices available for various investor needs, including the MSCI Climate Indexes, MSCI Low Carbon Indexes and the MSCI World Ex-Fossil Fuel Indexes.