Global Fossil Fuels Exclusion Indexes Intro

 

Why Global Fossil Fuels Exclusion Indexes?

Institutional investors are facing the necessity of divesting from some type of fossil fuel holdings. Over 1110 institutions with more than USD $11 trillion in assets under management have committed to divest from fossil fuels.1 They are increasingly concerned that these fossil fuel reserves could potentially be stranded in the context of the transition to a low carbon economy.

The below video highlights Jagdeep Bachher, CIO of the UC Investments being interviewed by MSCI CEO Henry Fernandez on the nature of risk and how UC Investments approaches sustainable investing.


Global Fossil Fuels Exclusion Indexes Video

Institutional Investor Conference 2020

CEO Henry Fernandez interviews Jagdeep Singh Bachher, CIO at UC Investments.

  • Risk as a human element
  • Sustainable Investing
  • Building an Ex-Fossil Fuels Portfolio

 

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Global Fossil Fuels Exclusion Indexes Video Intro

 

What are Global Fossil Fuels Exclusion Indexes?

The MSCI Global Fossil Fuels Exclusion Indexes were launched in 20142 to help institutional investors, including pension funds, who aim to eliminate or reduce some or all fossil fuel reserves exposure from their investments. These indexes are designed to represent the performance of the broad market while excluding companies that own oil, gas and/or coal reserves. The indexes use the MSCI ESG Climate Change Metrics provided by MSCI ESG Research and are currently available in the following two variants. The ex-Fossil Fuel and ex Coal screens can also be combined with other index methodologies.


Nested Applications

MSCI Global ex Fossil Fuels Indexes

 

MSCI Global ex Fossil Fuels Indexes

Companies that have proved & probable coal reserves and/or oil and natural gas reserves used for energy purposes are excluded from the MSCI Global ex Fossil Fuels Indexes.

 


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MSCI Global ex Coal Indexes

 

MSCI Global ex Coal Indexes

Companies that have proved & probable coal reserves used for energy purposes are excluded from the MSCI Global ex Coal Indexes.

 

Available Indexes

 

Available Indexes

The MSCI World ex Fossil Fuels Index is based on the MSCI World Index, its parent index, and includes large and mid-cap stocks across 23 Developed Markets (DM) countries.
The MSCI ACWI ex Fossil Fuels Index is based on the MSCI ACWI Index, its parent index, and includes large and mid-cap stocks across 23 Developed Markets (DM) and 27 Emerging Markets (EM) countries.
The MSCI EAFE ex Fossil Fuels Index is based on the MSCI EAFE Index, its parent index, and includes large and mid-cap stocks across 21 Developed Markets (DM) countries.
The MSCI Emerging Markets ex Fossil Fuels Index is based on the MSCI Emerging Markets Index, its parent index, and includes large and mid-cap stocks across 27 Emerging Markets (EM) countries.
The MSCI ACWI IMI ex Tobacco ex Fossil Fuels Index is based on the MSCI ACWI IMI Index, its parent index, and includes large, mid and small-cap stocks across 23 Developed Markets (DM) and 27 Emerging Markets (EM) countries.

 


Applications

Applications

The MSCI ex Fossil Fuel indexes can be used to support:

  • Asset allocation: the MSCI ex Fossil Fuel indexes can serve as equity policy benchmarks and to determine an asset allocation consistent with a fossil fuel divestment strategy.
  • Performance measurement and attribution: benchmark suite for global mandates that exclude fossil fuel, with regional, country, sector, and other subsets available for more targeted investment mandates.
  • Research: A trusted source for global equity markets and underlying security-level data for sell-side research.
  • Investment product development: May be licensed for use as the basis for structured products and other index-linked investment vehicles, such as ETFs and ETNs.

 

Further Reading

 

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