Investors Get New Tools from MSCI To Measure Carbon Risk - The Minute

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Investors Get New Tools from MSCI To Measure Carbon Risk - The Minute

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.@MSCI_Inc launches new #ESG driven Global Low Carbon & Green Bond indexes for investors http://3bl.me/kth6qy via @3BLMedia #CSRMinute
Thursday, October 9, 2014 - 4:00pm

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MSCI, a research firm that provides research and tools to asset managers, banks, hedge funds, and pension funds, has launched some new ESG-driven products for investors. Earlier this month, MSCI launched a new group of indexes of companies that have lower carbon exposure than the general market. The MSCI Global Low Carbon Leaders Indexes are the first to focus on two major aspects of carbon exposure: emissions and fossil fuel reserves. They provide investors with detailed data for limiting the exposure of their portfolios to carbon risk. The Low Carbon Leaders Indexes use MSCI’s ESG CarbonMetrics data.

MSCI has also expanded the group of Low Carbon Indexes with the recent launch of the MSCI Global Low Carbon Target Indexes. These Target Indexes provide benchmarks to identify risks such as the holding of stranded carbon assets. They re-weigh stocks based on their carbon exposure, and are designed to achieve maximum exposure reduction, given a specific tracking error target. These Low Carbon Indexes have received support from the UN’s Environment Program’s Finance Initiative, a global partnership between UNEP and the financial sector that includes over 200 institutions, including banks and fund managers who work with UNEP to analyze the impacts of environmental and social considerations on financial performance.

In November, MSCI will launch the Barclays MSCI Green Bond Indexes to help investors who are looking for alternatives to fossil-fuel and carbon-intensive securities. In this Index, securities are evaluated by MSCI ESG Research to decide the classification of a fixed-income security as a green bond. MSCI has released a green bond primer to inform investors to the full potential of the bonds, a market that will see $40 billion invested this year, and a projected $100 billion next year. 

I’m John Howell for 3BL Media.

Video Source: Investors Get New Tools from MSCI To Measure Carbon Risk

Keywords: 3bl Media | Responsible Business & Employee Engagement | Barclays MSCI Green Bond Indexes | CSR Minute | Company Ratings | MSCI | MSCI Global Low Carbon Leaders Indexes | UNEP | carbon exposure | esg

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