MSCI’s latest ESG paper deconstructs MSCI ESG Ratings to explore how environmental, social and governance factors performs by time horizon, sector and weighting.

With ESG becoming a key consideration within investment process, MSCI experts Hitendra Varsani and Guido Giese talk about the impact of ESG and how factors and risk models provide deeper insight.

Increasingly 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.

When it comes to ESG reporting and sustainability strategy, it’s clear that companies are stepping up their game – and just in time, as there is an avalanche of disclosure requirements coming their way. It’s coming for investors too, who may find that an energized base of issuers knows a thing or two about ESG data reporting.

The new MSCI ESG Universal Indexes are a modern way of indexing, and are designed to address the needs of asset owners (who also classify themselves as universal owners), who may look to enhance their exposure to ESG while maintaining a broad and diversified universe to invest in.

Interaction between MSCI ESG Research and the companies and fixed income issuers we rate continues to expand at a rapid pace.

You can use the interactive chart to compare the carbon intensity and stock allocations across the 20 largest ESG funds in our coverage universe.

Anthony Kruger, Director, EMEA Head of Factor ETFs and Hitendra Varsani, Executive Director, Global Solutions Research at MSCI discuss the latest factor updates and how investors can integrate factors and ESG to help improve long-term performance and reduce risk.

Assets allocated to ESG investments have boomed in recent years. While some may fear that accelerating allocations could lead to frothy valuations, research so far suggests this is mostly unwarranted. In 2021, we see both hype and skepticism about ESG giving way to acceptance and a more nuanced understanding of when and how ESG has shown pecuniary benefits — and when it hasn’t.

As the global economy copes with the unpredictable challenges of climate change, institutional investors are exploring the potential impact of these changes on financial assets.