Climate Change and Low-Carbon Risks and Opportunities in China
categories: Asia Pacific, Environmental, XU Shuo, WANG Xiaoshu, Investing (Investment Management), Performance Analysis, Portfolio Construction and Optimization, Responsible Investing, Asset Managers (Quant or Fundamental), Asset Owners, Banks, Hedge Funds, Indexes, ESG Products & Services, ESG Climate Solutions, ESG Indexes, Equities
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 the MSCI China Climate Change Index and MSCI China A Climate Indexes. In this paper, we analyze hypothetical investment portfolios tracking those two indexes.