MSCI BlogWhat Biden’s Climate Plan Means for US Utilities
Joe Biden is targeting net-zero carbon emissions in the United States by 2050, but the target date for electricity generation would come 15 years sooner. Are the U.S. utilities sector and investors prepared for net-zero emissions by 2035?
MSCI Blog2021 ESG Trends to Watch
Climate. ESG bubbles. Disclosure. Social inequality. Biodiversity. The topics don’t get much bigger — or more systemic. Here’s our analysis of the five ESG trends that will matter most to companies and their investors in 2021.
MSCI BlogInvestor Reaction to US Elections and COVID-Vaccine Progress
To gauge investor expectations after Joe Biden was declared winner of the U.S. election and good news broke about COVID vaccines, we surveyed 151 U.S.-based financial advisers. We examine the advisers’ views on the next 12 months and markets’ reaction since Election Day.
Research PaperAligning Portfolios with the Paris Agreement
The pressure on institutional investors to act on climate change and demonstrate its influence on their decision-making and portfolio construction continues to grow. Increasingly, the focus is on the alignment of client investment strategies with the decarbonization pathways required to deliver the global 1.5oC increase targeted by the Paris Agreement. This alignment may be achieved by overweighting companies on a credible path to decarbonization or offering green solutions, while in contrast...
MSCI BlogAligning with the Paris Agreement: An Index Approach
Institutional investors are under pressure to align their strategies with a maximum global temperature increase of 1.5oC as targeted by the Paris Agreement. We examine how they can approach this while respecting other investment constraints.
Research PaperFlooding in the Yangtze River Basin Threatens Mines and Power Plants
China’s Yangtze River economic belt accounts for nearly half of the country’s total economic output. Since 2020, the Hubei region has experienced record rainfall and historic flooding that has overwhelmed the banks of the river and the massive Three Gorges Dam. We identified 25 facilities in our coverage universe that are located downstream from the Three Gorges Dam and may be exposed to disruption or damage by the floods affecting the Yangtze River Basin.
MSCI BlogScope 3 Carbon Emissions: Seeing the Full Picture
How can investors identify emissions throughout the value chain of companies in their portfolios? We explain what these “Scope 3” emissions are, why they are so important and what actions investors can take as they seek to manage resulting risks.
MSCI BlogIdentifying Emerging “Hot Spots” for Physical Risk in the US
Climate change is expected to increase the frequency and severity of physical climate risks such as extreme temperatures, tropical cyclones, torrential rainfall and flooding. Our map identifies emerging climate risk hotspots in the U.S.
Research PaperClimate Change and Low-Carbon Risks and Opportunities in China
A transition to a low-carbon economy could alter the risk-return profile for many industries. The MSCI Climate Change Indexes aim to be practical tools to assist institutional investors in reflecting these potential changes in their investment strategies. They seek to do so by increasing the index weight for providers of low-carbon solutions and decreasing the weight of companies negatively exposed to such changes while seeking to maintain broad market exposure. In July 2020, MSCI launched...
Research PaperManaging Climate Risk in Investment Portfolios
Investors are increasingly concerned about how climate change and a transition to a low-carbon economy could impact the risk and return profile of their portfolios. In this case study, we selected a sample portfolio representative of a global actively managed fund in terms of its risk-return characteristics and used the MSCI Climate Value-at-Risk model to examine the different dimensions of climate-related risks. We show how Climate VaR can be used to measure climate risks for the portfolio...