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Climate Change Indexes Intro

Climate Change Indexes

Enabling investors to build more climate resilient portfolios

 

The MSCI Climate Change Indexes consider both the opportunities and risks associated with transition to a low carbon economy, enabling institutional investors and wealth managers to integrate climate risk considerations in their global equity investment process. The indexes are designed to exceed the minimum requirements of the EU Climate Transition Benchmark minimum requirements.


Key features

KEY POINTS OF MSCI CLIMATE CHANGE INDEXES:

The methodology uses the MSCI Low Carbon Transition1 (LCT) score and category to reweight constituents of a parent index to increase its exposure to companies participating in opportunities associated with transition and decrease its exposure to companies exposed to risks associated with transition.

 

The indexed applies an heuristics-based approach in order to meet the following objectives


Transition Risk

Transition Risk

Reduce Emissions

  • Minimum 30% reduction in Greenhouse Gas (GHG) Intensity (Scope 1+2+31) relative to the Reference Index
  • Potential emission intensity 30% lower
  • Neutral exposure to high impact sector1
  • Incentivize companies setting targets
Green Opportunities

Green Opportunities

  • Increases weight in companies which see opportunities from climate transition
  • 3x category tilt score for companies in Solutions LCT Category (green companies) to the parent index
1.5°C Alignment

Decarbonization

  • Annual decarbonization at 7% starting June 1st 2021 (base date)

 

EU Commission’s Delegated Acts for Climate Transition and Paris Aligned benchmarks
1 –Equity Climate Change Indexes only Full methodology: MSCI Climate Change Indexes Methodology

Factsheet

Methodology


AVAILABLE INDEXES

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Our team of experts is focused on in-depth research, ratings and analysis of the environmental, social and governance-related business practices of thousands of global companies.

Climate Indexes

MSCI offers climate indexes for both Equity & Fixed Income that aim to meet the variety of needs of institutional investors who wish to address climate change. The MSCI Climate Indexes can help reduce fossil fuel exposure, mitigate transition & physical risks, capture opportunities and align with the goals of the Paris Agreement.

Climate Solutions

We help institutional investors benchmark, measure and manage portfolio exposure to climate risk and identify low carbon opportunities.

Index Profile Tool

Explore ESG and climate metrics for all MSCI equity, fixed income and blended indexes regulated by the EU

Climate Indexes

MSCI offers climate indexes for both Equity & Fixed Income that aim to meet the variety of needs of institutional investors who wish to address climate change. The MSCI Climate Indexes can help reduce fossil fuel exposure, mitigate transition & physical risks, capture opportunities and align with the goals of the Paris Agreement.

Climate Solutions

We help institutional investors benchmark, measure and manage portfolio exposure to climate risk and identify low carbon opportunities.

Index Profile Tool

Explore ESG and climate metrics for all MSCI equity, fixed income and blended indexes regulated by the EU

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