Showing 21 - 30 of 314 entries
Research PaperClimate risk in private real estate portfolios: What’s the exposure?
As a long-term asset class, private real estate is especially vulnerable to climate-related events, such as water stress, hurricanes and flooding. The impact for investors could range from increased operational costs (e.g., damage to the property, repair costs) to the potential for higher insurance costs, property devaluation and in some extreme cases, the complete loss of the property. We analyzed physical risks in five real estate markets in different regions (Australia, South Africa, the...
Press ReleaseMSCI Completes Acquisition of Carbon Delta
Research PaperBanking on ESG: Examining the financial relevance of ESG to banks
Recent studies by MSCI ESG Research have shown an historical link between environmental, social and governance (ESG) factors and stronger corporate financial performance. However, investors may question whether the relationship between ESG and stronger financial characteristics also applied to banks. For spread businesses such as banks, profitability, returns and valuation are typically driven by balance-sheet strength, rather than by the transmission channels such as operational efficiency...
Research PaperTCFD-based reporting: A practical guide for institutional investors
This guide aims to support institutional investors who intend to follow the Task Force on Climate-related Financial Disclosures’ recommendations for reporting on their climate-related risk management processes. Climate-related risks pose a potential threat to the long-term resilience of portfolios, and there is a growing regulatory focus on investors’ climate risk management practices and disclosures. Approaches for developing a climate change strategy depend on the investor’s objectives,...
Research PaperClearing the Smoke Around Cannabis
Exposure to companies with ties to the cannabis industry raises challenges for investors. Some have sought to keep their portfolios cannabis-free while others have focused on long-term risks and opportunities. How can investors approach this challenge?
Research PaperClimate change and climate risk: An index perspective
A transition to a low-carbon economy could reduce demand for carbon-intensive products and services in favor of low-/zero-carbon counterparts. This migration in demand could also alter the risk-return profile — not only of individual companies but of some entire industries. The MSCI Climate Change Index aims to reflect these potential changes, increasing the index weight of companies identified as exposed to a low-carbon transition, while decreasing the weight in companies negatively exposed...
Research PaperUnderstanding MSCI ESG Indexes
This paper explains the different methodologies investors can use to integrate ESG considerations into a benchmark, assess their differences in terms of financial and ESG characteristics and understand potential trade-offs. In the financial industry, benchmarks are used at a strategic level — i.e., as policy benchmarks for defining the eligible investment universe or helping investors determine asset allocations — as well as at an implementation level — i.e., as a performance benchmark for...
Press ReleaseMSCI appoints Simone Bouch as Head of Australia and New Zealand Client Coverage
Research PaperAssessing Control: Measuring And Assessing The Alignment Between Economic Exposure And Voting Power At Controlled Companies
Where the controlling owners of a company have voting power that is disproportionate to their economic exposure, the company’s minority investors face some degree of increased risk. MSCI ESG Research’s ownership model enhances the ability of minority investors to assess ownership-related risks or benefits across two dimensions; it measures the level of control, and illuminates the motivations of the controlling entities. We extend this model by adding a third dimension, by measuring the...
Research PaperWeighing the Evidence: ESG and Equity Returns
Why has there been no clear consensus as to whether ESG has improved returns on a risk-adjusted basis? We find that many of the ESG investing methodologies used in studies were designed to meet social or ethical values and not financial objectives. To understand the link between companies’ ESG characteristics and their financial risk and performance, it is important to evaluate only the studies that use ESG methodologies specifically designed to identify financially relevant issues, such as...