Investor-focused decisions support tools and services company MSCI announced today the launch of its new Implied Temperature Rise solution, aiming to enable investors to assess the alignment of their portfolios with global temperature targets.

The new solution converts companies’ current and projected greenhouse gas emissions to an estimated rise in global temperature, taking into consideration the emissions reduction targets of each company. Covering nearly 10,000 publicly listed companies based on the MSCI ACWI Investable Market Index, the solution assesses the strength of the companies’ commitments, comparing projected emissions with the global carbon budget required to meet global climate targets, such as the Intergovernmental Panel on Climate Change’s (IPCC) 2°C goal, or the Paris Agreement goal of limiting warming to 1.5°C.

Remy Briand, Global Head of ESG and Climate at MSCI, said:

“Climate change is the greatest challenge of our time and capital markets participants are critical to driving the systemic transformation needed to avert climate catastrophe. The Implied Temperature Rise metric is an important addition to our evolving suite of climate investing tools and builds on MSCI’s mission to ensure capital markets and its participants can drive the transition to net-zero.”

The new release expands MSCI’s suite of solutions designed to help investors strengthen their engagement on climate risk and navigate the transition to a net-zero world, following the recent launch of MSCI Target Scorecard, a framework evaluating companies’ climate goals in terms of their comprehensiveness, ambition and feasibility.

Briand said:

“Investors are rapidly sharpening their focus on the financial impacts of climate change, and they need greater transparency and insight on whether their capital may further, or frustrate, the goal of a more sustainable society. With its convenient measure for forward-looking portfolio emission trajectory, investors can use Implied Temperature Rise as a versatile tool to set decarbonization targets and strengthen engagement on climate risk.”