MSCI ACWI Climate Pathway Select Index

What is MSCI ACWI Climate Pathway Select Index?

The MSCI ACWI Climate Pathway Select Index aims to represent the performance of a set of companies associated with the transition to a lower-carbon economy. The index also aims to maximize its exposure to companies that are setting science-based emission reduction targets (SBTs) or commit to reduction targets and have a track record of decarbonizing at a rate of at least 7%.

The index is constructed from the MSCI ACWI Index by excluding securities based on certain ESG and Climate Change related criteria¹ , followed by optimization aiming to –

• Increase the weight of companies which are exposed to climate transition opportunities and reduce the weight of companies which are exposed to climate transition risks
• Reduce the weight of companies assessed as high carbon emitters using scope 1, 2 and 3 emissions²
• Increase the weight of companies with credible carbon reduction targets through the weighting scheme
• Follow an annualized 7% year-on-year decarbonization trajectory

Further Readings

¹For more details on MSCI Climate Change Metrics: https://www.msci.com/climate-change-solutions

²For more details regarding MSCI Index Carbon Footprint Metrics: https://www.msci.com/index-carbon-footprint-metrics