Climate Action

MSCI Climate Indexes

MSCI offers a range of indexes for investors who seek to incorporate climate risks and opportunities into their investment process.

  • 02 April 2020
  • MSCI

MSCI offers a range of indexes for investors who seek to incorporate climate risks and opportunities into their investment process:

  1. Mitigate Risk: reduce exposure to long-term climate risks and stranded assets
  2. Capture Disruptive Opportunities: increase exposure to companies providing climate-friendly technologies and transformative solutions i.e. reward progress
  3. Promote Stewardship: shift behavior of companies to improve operations, develop long-term strategies and be transparent on progress i.e. incentives on better climate risk management

 

MSCI’s range of climate indexes can be grouped into three categories:

  1. MSCI Climate Change Indexes: The indexes are designed to enable investors to holistically integrate climate risk considerations in their global equity investment process, while increasing diversification through a simple, rules-based reweighting methodology.
  2. MSCI Low Carbon Indexes: Launched in 2014, they are the first index series designed to address two dimensions of carbon risks: long term risk by reducing the index’s exposure to not only carbon emissions but also fossil fuel reserves and short-term risk by aiming to have a low tracking error compared to the parent index.
  3. MSCI Global Environmental Indexes: Launched in 2010, the Global Environmental indexes are designed to maximize exposure to clean technologies. They include companies that generate 50% or more revenues from products and services that contribute to a more environmentally sustainable economy. The index stock selection process utilizes MSCI ESG Sustainable Impact Metrics

Find out more about MSCI's Climate Indexes here