Climate solutions intro


With our holistic MSCI Climate Solutions toolkit we aim to empower financial institutions with the tools necessary to build more climate resilient portfolios, protect assets from the worst effects related to climate change and also help identify new, innovative low carbon investment opportunities.   

We are pleased to introduce the MSCI Climate-Value-at-Risk (Climate VaR) , provided by MSCI ESG Research LLC, which provides forward looking and return-based valuation assessments to measure the potential impact of climate change on company valuations. It provides financial institutions – including investment managers, banks, asset owners and insurers – with the means to identify assets that may be at risk from the worst effects resulting from climate change, while helping to identify innovative low carbon investment opportunities, through security specific modelling.

Contact our ESG Client Service team to learn more.  

 

MSCI Climate Solutions

 


Nested Applications

Nested Applications

Climate Solutions 1

Climate Data & Metrics

 

Climate Data & Metrics1

 

Extensive climate change metrics including Climate Value-at-Risk, carbon management assessment, carbon and clean tech metrics and fossil fuel screens.

 

 

State of the art model

 

Broad coverage across equities, fixed income and real estate

 

 

 

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Climate Solutions 2

Climate Risk Reporting

 

Climate Risk Reporting1

 

Scalable client reporting and automated report generation on the climate risk and opportunities exposure of your portfolio.

 

 

 

MSCI Carbon Portfolio Analytics

 

MSCI Climate Risk report

 

Climate Value-at-Risk report

 

 

 

Download factsheet


Nested Applications

Climate Solutions 3

Scenario Analysis

 

Scenario Analysis1

 

Assess portfolio vulnerability to scenarios and the potential financial sensitivity to these risks and opportunities.

 

 

Potential financial impact of different climate scenarios

 

Warming Potential of portfolio to assess alignment with the Paris Agreement

 

Climate stress testing

 

Read the brochure


Climate Solutions 4

Climate Indexes

 

Climate
Indexes1

 

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

 

 

Risk optimization in portfolios

 

Capture disruptive opportunities

 

Promote stewardship

 

 

 

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Cliamte solutions wheel

 


 

 

Integrating climate solutions into your investment process

MSCI’s Climate Solutions give you access to a wide range of tools and data designed to enable you to address a variety of needs including measuring and reporting on climate risk exposure, implementing low carbon fossil fuel-free strategies, factoring climate change research into risk management processes and engaging companies and external stakeholders .


Nested Applications

Climate Solutions Wheel table 1

 

Engage

  • Engaging with companies and external stakeholders to promote a more resilient world
 

Integrate

  • Integrate climate change considerations into company assessments
  • Develop Low Carbon & Fossil Fuel Free strategies (active and indexed)
  • TCFD Climate Scenarios Stress testing
 

Assess

  • Assess exposure to climate change risks and opportunities
  • Scenario analysis
  • Peer benchmarking
 

Allocate

  • Define climate change strategy accross asset classes
  • Allocate to low carbon investments

  

Climate Solutions Wheel table 3

  Assess exposure to climate change risks and opportunities (Scenario analysis, Peer benchmarking) / Define climate change strategy accross asset classes (Allocate to low carbon investments)/Integrate climate change considerations into company assessments (Develop Low Carbon & Fossil Fuel Free strategies - active and indexed, TCFD Climate Scenarios Stress testing)/Engage with companies and external stakeholders to promote a more resilient world  

Climate change – a key risk for institutional investors

 


 

 

Climate change – a key risk for institutional investors

A 2019 report by the United Nations estimates that delayed action on climate change could cost investors about $1.2 trillion worldwide during the next 15 years. Delayed action could not only increase policy risk, but may also result in much greater physical climate risk due the increased accumulation of GHG concentrations in our atmosphere.

Responding and adapting in a timely fashion may mitigate the risk and can also create new investment opportunities. Green revenues generated from the sale of low carbon technologies may help companies offset costs from complying with greenhouse gas (GHG) reduction policies. Under the 2°C scenario, the sum of all green profits are significant – approximately USD 2.1 trillion.2

Examples of Climate-related financial impact

California – Clean Energy Act of 2015: US solar installation companies saw their revenues soar between 2013 and 2017.[1] / Massachusetts –tidal flooding: Since 2005 the local real estate market has collectively lost about $273 million of coastal property value due to flooding from sea level rise.[2] / India – electric vehicles: According to government plans every car sold in India from 2030 will be electric.[3] / Australia – Wildfires 2019: Insurers have received claims worth of $480.8million as of January 8 and they expect the number will grow significantly.[4]

Massachusetts – tidal flooding
Since 2005, the local real estate market has collectively lost about $273 million of coastal property value due to flooding from sea level rise.[3]
California – Clean Energy Act of 2015
US solar installation companies saw their revenues soar between 2013 and 2017.[5]
India – electric vehicles
According to government plans, every car sold in India from 2030 will be electric.[4]
Australia – Wildfires 2019
Insurers have received claims worth of $480.8 million as of January 8, and they expect the number will grow significantly.[5]

test 1

Compliance with global policy

 
 

Paris Agreement went into force in November 2016

 

189 countries committed to greenhouse gas targets by 2030

 

2°C long term climate stabilization goal

Here to stay

 

Warming is up by 1°C over the past 100 years

 

CO2 concentration levels could lead to an additional 0.5°C in the years to come

 

Warming above 2°C could have disastrous effects

Opportunities

 

Energy efficiency projects can reduce energy costs

 

Climate change mitigation may brings socio-economic benefits

 

Low carbon technologies are experiencing high growth3

Remy's quotes

We believe climate change will become one of the most important investment factors over the long term. Institutional investors should be able to analyze the exposure of their portfolios to climate risk while also being able to report on their climate strategy.
Remy Briand, Head of ESG at MSCI

TCFD-alignment

 

TCFD-alignment

Reasearch Driven Insights

The G20 Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) released recommendations in June 2017, which highlighted the importance of using scenario analysis to assess climate change related impacts within the financial sector.

It calls for the assessment of both the risk and opportunity side of transition and physical climate change impacts, and creates a reporting framework that allows institutions to prepare themselves for upcoming regulations.

MSCI’s TCFD based reporting brief is aimed at institutional investors intending to report on their climate transition risk management processes according to the TCFD recommendations.

 

Explore TCFD


Climate Solutions Product card without image

Learn more about our ESG solutions

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.

A road map for resilient carbon-transition portfolios

Is your portfolio ready for the transition to a low-carbon economy?

Introducing MSCI Climate Change Indexes

The indexes are designed to measure opportunities and risks associated with the transition to a low carbon economy.

Contact us

Get in touch with the MSCI ESG Client Service team to find out more.

A road map for resilient carbon-transition portfolios

Is your portfolio ready for the transition to a low-carbon economy?

Introducing MSCI Climate Change Indexes

The indexes are designed to measure opportunities and risks associated with the transition to a low carbon economy.

Contact us

Get in touch with the MSCI ESG Client Service team to find out more.

Legislation

MSCI ESG Research LLC. is a Registered Investment Adviser under the Investment Adviser Act of 1940. The most recent SEC Form ADV filing, including Form ADV Part 2A, is available on the U.S. SEC’s website at www.adviserinfo.sec.gov.

MIFID2/MIFIR notice: MSCI ESG Research LLC does not distribute or act as an intermediary for financial instruments or structured deposits, nor does it deal on its own account, provide execution services for others or manage client accounts. No MSCI ESG Research product or service supports, promotes or is intended to support or promote any such activity. MSCI ESG Research is an independent provider of ESG data, reports and ratings based on published methodologies and available to clients on a subscription basis.  We do not provide custom or one-off ratings or recommendations of securities or other financial instruments upon request.

ESG ADV 2A
ESG ADV 2B (brochure supplement)

 

 

Climate Data and Metrics, Climate Risk Reporting and Scenario Analysis are provided by MSCI ESG Research LLC. MSCI ESG Indexes and Analytics utilize information from, but are not provided by, MSCI ESG Research LLC. MSCI Equity Indexes are products of MSCI Inc. and are administered by MSCI UK Limited.

Source: https://www.unepfi.org/news/industries/investment/changing-course-unep-fi-and-twenty-institutional-investors-launch-new-guidance-for-implementing-tcfd/ – https://www.unepfi.org/wordpress/wp-content/uploads/2019/05/TCFD-Changing-Course-Oct-19.pdf

https://www.seia.org/solar-industry-research-data

4 https://firststreet.org/press/rising-seas-swallow-403-million-in-new-england-home-values/

https://www.ibtimes.co.in/watch-india-unveils-ambitious-plan-have-only-electric-cars-by-2030-724887

Source: https://www.insurancejournal.com/news/international/2020/01/08/553871.htm

Regulation