MSCI launches climate indexes

MSCI Inc has launched the MSCI Climate Paris Aligned Index Suite.

The eight new indexes build on MSCI’s existing suite of climate indexes and help investors seeking to tackle climate change holistically by reducing both their transition and physical risks, identify green opportunities, and align their investment strategies with the 1.5-degree warming scenario, as targeted by the Paris Agreement.

Combining expertise and insight from MSCI’s Climate Risk Center, the indexes include climate data from MSCI’s Climate Value-at-Risk (Climate VaR) tool, scope 3 emissions data, and green revenues. The indexes 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.

“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,” says Remy Briand, Head of ESG at MSCI. “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.”

“We have witnessed tremendous interest in ESG and climate indexes over the past 18 months and continue to see fast adoption,” says Diana Tidd, Head of Index at MSCI. “As end-investor awareness and stakeholder pressure rises, institutional investors increasingly want to invest to affect more systemic, global change beyond the company or portfolio level. We designed the MSCI Climate Paris Aligned Indexes to provide a solution for institutional investors looking to do just that.”

The MSCI Climate Paris Aligned Index Suite forms part of a suite of MSCI climate indexes available for various investor needs, including the MSCI Climate Indexes, MSCI Low Carbon Indexes and the MSCI World Ex-Fossil Fuel Indexes.