Guido Giese is MSCI’s global head of research for ESG and climate solutions, leading applied research and thought leadership on ESG integration and impact and climate investing. Prior to joining MSCI, he was responsible for sustainability index solutions at RobecoSAM, following his tenure leading research and development at index provider STOXX Ltd. Guido has more than 20 years’ experience in research and product development in asset management. He holds a doctorate in applied mathematics from the Swiss Federal Institute of Technology Zurich and has authored numerous articles in international journals on quantitative finance and risk management.
Research and Insights
Articles by Guido Giese
What’s Been Driving the Carbon Footprint of MSCI’s ESG Indexes?5 mins read Blog | Sep 22, 2023 |
We analyze the index-level carbon emissions of the MSCI ACWI, ACWI ESG and Socially Responsible Investing Indexes, in terms of both financed emissions and emissions intensities, to see what the trends are and what’s driving them.
Understanding the Drivers of Transition-Risk Climate VaR5 mins read Blog | Aug 18, 2023 |
Climate stress-testing models like MSCI Climate VaR may be complex, but their main mechanisms can be explained using linear regression. This helps transform input variables into risk outputs, making it easier for investors to understand the primary drivers.
Tracking Multi-Asset-Class Portfolios’ Emissions8 mins read Blog | Aug 8, 2023 |
Our previous research discussed a framework for investors to attribute changes in equity portfolios’ emissions to their primary drivers. We now adapt it to identify and analyze two approaches to tracking a multi-asset-class portfolio’s carbon footprint.
Tracking a Corporate-Bond Portfolio’s Emissions Over Time7 mins read Blog | May 30, 2023 |
Several factors can drive the changes in a corporate-bond portfolio’s emissions. Our framework helps disentangle these variables and provides investors with greater clarity into their climate-aware strategies.
Connecting Emissions Attribution with Climate Action6 mins read Blog | May 16, 2023 |
Tracking a portfolio’s carbon footprint can be challenging given the multiple drivers of changes in emissions. Our framework attributes these changes to their primary drivers, including changes in issuers’ emissions, ownership and financing structure.
The Climate Transition Is Increasingly About OpportunityResearch Report | May 15, 2023 |
Climate-friendly policies and regulations and the massive reallocation of capital needed in the coming years to ensure a successful shift to a net-zero economy should continue to expand the range of opportunities for both companies and investors.
A Framework for Attributing Changes in Portfolio Carbon FootprintResearch Report | May 3, 2023 |
We present a framework that allows investors to understand to what extent changes in a portfolio’s carbon footprint are due to companies’ real-world decarbonization efforts, a portfolio manager’s investment decisions or changes in companies’ financing.
How ESG Risk Management Can Impact Security RiskResearch Report | Apr 13, 2023 |
Following extensive research showing an improvement in risk-adjusted returns for companies with higher ESG ratings, we look beyond what a company’s ESG issues were to how that company dealt with them — and the impact that had on stock-specific risk.
ESG Factor Returns: 2022 in Review5 mins read Blog | Mar 7, 2023 |
Our analysis of ESG factor performance in 2022 suggests that time horizons, as well as specific sectors and regions, may be significant in assessing the return characteristics of ESG portfolios.
Corporate Bonds and Climate Change RiskResearch Report | Feb 22, 2023 |
In this paper, we highlight to investors and portfolio managers the significance of climate-change risk for the value of corporate bonds, as well as provide a framework for further research in this area.
How to Evaluate Climate Metrics and Avoid the Big Confusion5 mins read Blog | Feb 8, 2023 |
Climate metrics can often be a daunting field, with misunderstanding and confusion rife. We present a two-step toolkit that can help investors identify the most suitable metrics as they look to gauge progress toward their climate-investing goals.
Understanding MSCI’s Climate MetricsResearch Report | Jan 10, 2023 |
With no “one fits all” solution, to help investors identify the most suitable climate metrics, we take an in-depth look at MSCI ESG Research’s climate metrics in terms of what they measure, how they are calculated and their potential use cases.
Net-Zero Alignment for Multi-Asset-Class Portfolios7 mins read Blog | Sep 19, 2022 |
Asset owners who want to keep global warming below 1.5 degrees Celsius (1.5°C) have a tough row to hoe.
Illuminating the Relationship Between ESG and PerformanceResearch Report | Jul 27, 2022 |
Time horizons are key to understanding the impact of environmental, social and governance on stock returns. This paper, which was published in Investments & Wealth Monitor, illustrates the relative importance of event risk vs. erosion risks over time.
What the War in Ukraine Could Mean for Net-Zero InvestingResearch Report | May 16, 2022 |
Among the devastating effects of the Russia-Ukraine war is the potential to derail the world from its already difficult path to net-zero. We analyzed how the war could affect the world’s carbon emissions and decarbonization efforts — and investors.
Could Europe’s Shift from Russian Gas Accelerate Climate-Transition Risk?5 mins read Blog | Mar 30, 2022 |
Europe’s search for energy sources outside of Russia may slow the low-carbon transition in the short term. Staying within a net-zero cumulative emissions budget would mean fewer emissions later. What might this path mean for investors’ portfolios?
How ESG Affected Corporate Credit Risk and PerformanceResearch Report | Nov 30, 2021 |
Environmental, social, and governance (ESG) investing is a very broad field with many different investment approaches addressing various investment objectives across asset classes. While there are many studies relating to ESG in equities, the risk assessment of ESG considerations within fixed income may be equally if not more important.
Climate Matters: What’s in an ESG Rating. And What’s Not.6 mins read Blog | Nov 23, 2021 |
ESG ratings are widely used in active management and ESG indexes, with a growing focus on climate change. This has increased debate around two questions: Why are ESG ratings so different across providers? And how do ESG ratings reflect climate risk?
Understanding MSCI Climate Indexes: Methodologies, Facts and FiguresResearch Report | Nov 2, 2021 |
Integrating climate considerations into benchmarks is one way to build a consistent framework for integrating climate risk across an entire equity portfolio. We discuss four categories of climate indexes that reflect investor objectives and preferences.
Constructing Net-Zero Portfolios: Three Approaches4 mins read Blog | Sep 30, 2021 |
While investors around the world are committing to bring the carbon footprints of their portfolios to net-zero by 2050, figuring out how to do so is not a simple matter. What alternatives do investors have?
Net-Zero Alignment: Objectives and Strategic Approaches for InvestorsResearch Report | Sep 20, 2021 |
Investors have a key role in keeping global warming well below 2°C. We examine four strategic levers that investors can use to accelerate companies’ decarbonization: a shift of capital, active stewardship, financing of low-carbon solutions and policy advocacy.
Foundations of Climate Investing: How Equity Markets Have Priced Climate-Transition RisksResearch Report | Sep 1, 2021 |
To what extent has climate risk been priced into equity markets? How can we model such risks as the world moves toward net-zero targets? We show how climate has increased in importance in the last two years, with potential long-term implications for understanding equity markets.
Deconstructing ESG Ratings Performance: Risk and Return for E, S And G by Time Horizon, Sector and WeightingResearch Report | Mar 30, 2021 |
How are environmental, social and governance (ESG) ratings constructed? Which indicators are the most important in assessing ESG characteristics? Does the answer vary by sector? This foundational paper examines the impact on financial performance of two types of ESG indicators: the individual E, S and G pillars scores and the underlying ESG Key Issue scores.
How Have Stocks Responded to Changes in Climate Policy?7 mins read Blog | Mar 1, 2021 |
To what extent has climate risk been priced into equity markets? Is there a “brown” discount and a “green” premium? Has this shifted over time? How can we model such risks as the world moves toward net-zero targets? We examine the financial impact of climate transition risk on global equity markets.
The Drivers of ESG ReturnsResearch Report | Feb 26, 2021 |
As the COVID-19 crisis affected financial markets, all standard MSCI ACWI ESG equity indexes outperformed their market-capitalization benchmarks. Where has this outperformance come from? Have inflows into ESG investments driven up equity valuations, possibly creating a price bubble?
How Are High-ESG-Rated Bond Portfolios Distinct?7 mins read Blog | Feb 5, 2021 |
ESG investing makes up an increasingly large footprint in equity portfolios, but ESG integration in bond portfolios is still in its early days. We examine the characteristics that make high-ESG-rated corporate-bond portfolios distinct.
Better Together: Policy Benchmarks, Active Equity and ESGResearch Report | Jan 25, 2021 |
As we’ve previously demonstrated, incorporating firm-level ESG characteristics into portfolio construction can preserve, and even improve, risk and return relative to the broad market. Here we follow-up by asking how an allocator can integrate ESG considerations efficiently across multiple portfolios in its equity program.
Is ESG Investing a Price Bubble? Probably Not.6 mins read Blog | Dec 9, 2020 |
Inflows into ESG funds have soared in recent years and months, in part motivated by outperformance since the COVID-19 pandemic erupted. But have these inflows become a self-fulfilling prophecy, creating an ESG bubble?
What ESG Ratings Tell Us About Corporate Bonds6 mins read Blog | Nov 11, 2020 |
How did incorporating ESG factors affect the performance of corporate-bond portfolios? Did ESG add insights beyond credit ratings? How did ESG impact risk and performance of investment-grade and high-yield bonds? Short-dated versus long-dated bonds?
Combining E, S, and G Scores: An Exploration of Alternative Weighting SchemesResearch Report | Sep 2, 2020 |
How one combines environmental, social and governance scores into an overall ESG rating can have a significant impact on its usefulness to investors. We tested two approaches: equal weighting and backward optimization. The results suggest that investors proceed with caution. As published in The Journal of Impact & ESG Investing.
ESG Ratings: How the Weighting Scheme Affected PerformanceBlog | Jun 29, 2020 |
Our recent research suggests that environmental and social issues were more industry specific and tended to show up in financial measures over a longer time frame compared to governance issues. How can E, S and G issues be combined?
Which ESG Issues Mattered Most? Defining Event and Erosion Risks10 mins read Blog | Jun 22, 2020 |
Very different ESG issues can be material for different industries. Our research suggests that risks can be divided into two main types: “event” risks and “erosion” risks to companies’ long-term competitiveness. Which ones mattered most for E, S and G?
Welche ESG-Kriterien waren die wichtigsten? Definition von Ereignis- und Erosionsrisiken10 mins read Blog | Jun 22, 2020 |
Geht es bei ESG nur um das „G“? Das hängt von Ihrem Zeithorizont ab10 mins read Blog | Jun 15, 2020 |
Is ESG All About the ‘G’? That Depends on Your Time Horizon.10 mins read Blog | Jun 15, 2020 |
The conventional wisdom has it that governance is the most dominant of the three E, S and G pillars. But our analysis finds different results when looking at contribution to performance over different time horizons.
MSCI ESG Indexes during the coronavirus crisis8 mins read Blog | Apr 22, 2020 |
The COVID-19 outbreak is the first real-world test since the 2008 global financial crisis of the resilience of companies with high MSCI ESG Ratings. We analyze the performance of four standard MSCI ESG Indexes over Q1 2020 and longer periods.
Have regional equity-market correlations risen?Blog | Nov 15, 2019 |
Global equity investors use regions as building blocks in asset allocation, typically segregating markets by how developed they are and by geography. Has globalization reduced the potential for geographical portfolio diversification?
Looking inside ESG indexesBlog | Aug 30, 2019 |
Many investors want to stick to their values or beliefs, as well as meet certain financial objectives. How can ESG indexes help them address these goals?
How Markets Price ESG: Have Changes in ESG Scores Affected Stock Prices?Research Report | Nov 12, 2018 |
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? We investigate these questions by looking into how changes in companies’ ESG profiles have historically predicted equity...
Foundations of ESG Investing – Part 4: Integrating ESG into Factor Strategies and Active PortfoliosResearch Report | Jun 7, 2018 |
How can ESG characteristics be integrated consistently across factor-based and active equity allocations? In Part 4 of the Foundations of ESG Investing paper, we discuss two approaches to applying ESG ratings to factor-based allocations – a one-step and a two-step approach – asking which has done a better job at combining the underlying strategy with ESG while maintaining exposure to target factors. We then investigate overlaying ESG ratings and ESG momentum on the historical holdings of...
Foundations of ESG Investing – Part 3: Integrating ESG into Indexed Institutional PortfoliosResearch Report | May 16, 2018 |
According to recent surveys, asset owners’ have shifted their main focus to ESG’s financial benefits, as opposed to social benefits. In the third part of this paper, we discuss how ESG can be integrated into indexed allocations using MSCI ESG Ratings, which provided better risk-adjusted returns from August 2010 to December 2017 than the MSCI ACWI Index. We used existing best-in-class selection-based index methodologies (the MSCI ESG Leaders Index) for the creation of hypothetical global and...
Foundations of ESG Investing – Part 1: How ESG Affects Equity Valuation, Risk and PerformanceResearch Report | Nov 29, 2017 |
Many studies have focused on the relationship between companies with strong ESG characteristics and corporate financial performance. However, these have often struggled to show that positive correlations — when produced — can in fact explain the behavior. This paper provides a link between ESG information and the valuation and performance of companies, both through their systematic risk profile (lower costs of capital and higher valuations) and their idiosyncratic risk profile...
Has ESG Affected Stock Performance?Blog | Nov 29, 2017 |
Are ESG characteristics tied to stock performance? Many researchers have studied the relationship between companies with strong environmental, social and governance (ESG) characteristics and corporate financial performance. A major challenge has been to show that positive correlations — when produced — explain the behavior. As the classic phrase used by statisticians says, “correlation does not imply causation.”