MSCI announced today the launch of the MSCI Climate Paris Aligned Index Suite, with the introduction of eight new indices targeted to investors seeking address climate change through their investments.
According to MSCI, the new index suite aims to help investors 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.
Remy Briand, Head of ESG at MSCI, said:
“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.”
The new indices utilize expertise and insight from MSCI’s Climate Risk Center, incorporating climate data from MSCI’s Climate Value-at-Risk (Climate VaR) tool, scope 3 emissions data, and green revenues. On the disclosure and reporting front, the indices incorporate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and are designed to exceed the minimum standards of the EU Paris Aligned Benchmark designation.
The MSCI Paris Aligned Index Suite adds to MSCI’s climate themed index offerings, which also include the MSCI Climate Indexes, MSCI Low Carbon Indexes and the MSCI World Ex-Fossil Fuel Indexes.
Diana Tidd, Head of Index at MSCI, said:
“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 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.”