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MSCI Launches New Climate Action Indexes for Net Zero Transition Progress

Climate Investing News

MSCI Launches New Climate Action Indexes for Net Zero Transition Progress

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MSCI Inc., a leading provider of critical decision support tools and services for the global investment community, has today announced the launch of the MSCI Climate Action Indexes. The indexes are designed for investors seeking to drive the low carbon transition in the real economy by investing in companies making progress towards emission reduction targets.

The new suite of equity climate indexes will consist of companies that are taking measurable steps to tackle their emissions, selecting from across the economy using the 11 Global Industry Classification Standard (GICS) sectors. The suite of MSCI Climate Action Indexes includes MSCI ACWI Climate Action Index, MSCI World Climate Action Index, MSCI Emerging Markets Climate Action Index, MSCI USA Climate Action Index and MSCI Europe Climate Action Index.

The new index is aimed at equity investors who want an index with exposure to all sectors of the economy and who favour a bottom-up index selection approach based on both current and forward- looking climate indicators. The index aims to include companies that are taking steps to tackle their emissions. The index is sector balanced and offers a broad market coverage.

The indexes also aim to help investors who are seeking to follow the Glasgow Financial Alliance for Net Zero (GFANZ) recommendations on addressing real-economy emissions reductions.

The launch of MSCI Climate Action Indexes complements MSCI’s extensive range of ESG and Climate indexes that enable investors to integrate climate considerations into global and regional equity market portfolios. Alongside Climate Action Indexes helping to drive the transition in the real economy, investors can select MSCI Low Carbon Target Indexes that aim to reduce portfolio emissions, and MSCI Climate Paris Aligned Indexes that aim to align with a 1.5 degree temperature rise scenario for those implementing net zero strategies.

See related article: MSCI and the London Stock Exchange Reject EU ESG Regulation Proposals

Institutional investors can use these indexes as reference benchmarks; to create products including ETFs, derivatives, structured products and mutual funds; and as a performance measurement benchmark for actively managed portfolios.

Melissa McDonald, Head of ESG and Climate Indexes, MSCI, comments: “At a time when the climate crisis must be tackled head-on, the decarbonization of investment portfolios is a critical first step. The MSCI Climate Action Indexes helps investors looking to fulfil that aim by gaining exposure to the companies that are making meaningful progress towards net zero in the real economy and addressing the systemic risks of climate change.

“This launch demonstrates our ongoing commitment to ensure that investors have the information and tools they need to develop portfolios that meet their net zero commitments, integrate climate considerations and fulfil their investment objectives.”

Source: MSCI

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