Climate: MSCI expands index range

MSCI launches new “climate change” indices. Objective: to help investors identify and evaluate the opportunities and risks of transitioning to a low-carbon economy. investissement défiscalisant
 As a provider of decision support tools and services for international investors, Morgan Stanley Capital International (MSCI) is launching new climate indices. Objective: to enable investors to more easily identify and evaluate the opportunities, but also the risks associated with the transition to a low carbon economy. MSCI’s new climate change indices are part of a broad range of tools designed to help investors build more resilient climate risk portfolios and integrate them into their investment processes.
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Based on a simple methodology, these indices re-titled the stocks according to the MSCI Low Carbon Transition Score, which measures companies’ exposure to the risk of transition to a low-carbon economy (carbon emissions and fossil fuel reserves) and their exposure to opportunities related to alternative energies or clean energies. They can be used as individual indices or in combination with a global ESG strategy. These new indices add to MSCI’s existing range of weather indices to meet the needs of institutional investors seeking to address climate change issues in their portfolios, including the MSCI Low Carbon and MSCI Global Environmental indices.
 The devastating effects of climate change, explains Rémy Briand, MSCI ESG manager, will be felt beyond the traditional boundaries of most sectors. It is essential that the financial industry be concerned about this, to enable the transition to a low-carbon economy before climate change becomes a factor of instability. Although taking action now may be risky, there is growing evidence that anticipated actions will eventually result in a less costly adjustment. At MSCI, we continue to develop our climate change solutions using next generation data, analytics and tools to help align with a 1.5 ° C warm-up scenario. As climate research continues to evolve, we will ensure that our relevant indices reflect the latest developments. “
A sustainable financial system
EDF will use MSCI’s “climate change” indices for part of the € 27.7 billion spent on decommissioning nuclear power plants. “As a responsible asset manager,” says Bernard Descreux, head of the asset management division of the electricity supplier, “we are convinced that it is essential to enable the transition to a low-carbon economy to achieve the place of a sustainable financial system. MSCI is our ideal partner, as we seek to ensure the long-term nature of our long-term investments. “
MSCI’s climate change indices aim to increase exposure to companies that offer solutions to climate change, with twice as much exposure to climate change as in the benchmark. They also help reduce exposure to stranded assets, with exposure to thermal coal reduced by 50% and exposure four times lower to companies offering strong products. carbon intensity compared to the parent index.
Investors can use these indices as a benchmark universe to guide their asset allocation strategies, underlyings for passive products (such as ETFs), asset managers’ performance measure, tool for better understand the impact of climate change on the risk and return factors of portfolios or the instrument of dialogue with companies (with a view to improving their ESG performance).
It should be noted that these indices do not exclude stocks according to their climatic performance, which favors long-term commitment to companies.