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Understanding MSCI Climate Indexes: Methodologies, Facts and Figures

Integrating climate considerations into an investor’s set of benchmarks is one way to build a consistent framework for integrating climate risk across an entire portfolio. Investors often aim to capture more than one objective through their capital allocations, including addressing financial risks and opportunities, incentivizing companies to change their business models and steering capital toward green-technology companies. To address these different preferences, MSCI has developed four categories of climate indexes. Three are broad-based, with limited tracking error, while the fourth takes a more concentrated approach. In this Product Insight and accompanying FAQ, we discuss MSCI climate indexes available to investors.

Objectives of Climate Change Investing