ESG Research

More and more institutional investors are integrating environmental, social and governance (ESG) factors into their investment processes. Our research is designed to help investors identify risks and opportunities, and focus in on key ESG performance drivers.

 


 

FEATURED Research papers and Blog Posts


Investment risks in carbon-dependent industries

Blog Post - Carbon-intensive industries have been the primary focus of attention for investors looking to reduce carbon-related risks in their portfolios. But these particular industries are only part of the picture. Institutional investors may want to look beyond the usual suspect carbon-intensive industries to better understand the end-to-end risks.


Aligning portfolios with UN Sustainable Development Goals

Blog Post - Is my money helping solve the world’s problems or making them worse? Such searching questions are being asked by an increasing number of beneficiaries of public funds, about where and how their retirement funds are invested. But understanding the societal impact of an investment is no easy task for institutional investors. We propose a systematic framework they can use.


How Markets Price ESG: Have Changes in ESG Scores Affected Stock Prices?

Research Paper: Many researchers have studied the link between companies’ Environmental, Social and Governance (ESG) characteristics and financial risk and performance. This paper examines some of the underlying economic questions: How have markets priced ESG characteristics? Have they been fully priced? Have there been sweetspots? How quickly did the market incorporate ESG information?


Quitting tobacco stocks without going through withdrawal

Blog Post: Despite strong headwinds, the tobacco industry has proved quite resilient. Some institutional investors may be asking whether they should lift tobacco bans in their investment policies. We believe the better questions are: What drove tobacco stocks’ performance? Could investors have obtained the gains associated with these stocks without actually owning them?


Corporate disclosure in a TCFD world

Blog Post: In June 2017, the Task Force on Climate-related Financial Disclosure (TCFD) released climate-related disclosure recommendations that included a framework for better company disclosure and a request for climate scenarios as part of that disclosure. But how many companies actually provide the requested data?


Taking Stock: Share Buybacks and Shareholder Value

Research Paper: Contrary to concerns expressed by many observers, we found no compelling evidence of a negative impact from share buybacks on long-term value creation for investors overall. We did find, however, that share buybacks can impact long-term investment returns differently for active and passive investors.


CAN THE RIGHT BENCHMARK IMPROVE YOUR VISION?

Blog Post: As interest in ESG investing continues to grow, so does the number of actively managed strategies that integrate environmental, social and governance considerations into their investment processes. However, institutional investors and managers have been benchmarking many of these ESG-tilted strategies against standard market-cap-weighted indexes. While these indexes provide a broad basis for evaluating performance, they lack the ability to provide the insights that might be gained from ESG-focused benchmarks. Such indexes may help improve investors’ vision and understanding of managers with high ESG scores.


“G” is just one part of the ESG story

Blog Post: When it comes to ESG (environmental, social and governance) investing, conventional wisdom holds that G is the only part that really matters, as a window into overall management quality and providing insights and value for investors. Our analysis suggests this has not been true; that the E and S aspects of ESG did help sort the truly outstanding firms from a group that already shares an array of robust financial traits.

 

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)

 

Foundations of ESG Investing

How ESG Affects Equity Valuation, Risk and Performance.

Foundations of ESG Investing: From “Why ESG” to “How ESG”

Linda-Eling Lee, Global Head of ESG Research, outlines six approaches for integrating ESG into the investment process.

ESG Ratings

MSCI ESG Ratings help investors identify ESG risks and opportunities in their portfolio. We research and rate companies on a 'AAA' to 'CCC' scale according to their exposure to specific ESG risks and their ability to manage those risks relative to their peers.