MSCI has launched an implied temperature tool, which will assess how companies are aligning with global temperature targets as the effects of climate change are felt.
The Implied Temperature Rise solution will provide investors with data to map how companies in their investment portfolios are aligning with global temperature targets.
The company-level dataset will cover nearly 10,000 publicly listed companies based on the MSCI ACWI Investable Market Index.
The tool is in line with the Task Force on Climate-Related Financial Disclosures (TCFD), which recommends all financial institutions measure and disclose the alignment of their portfolios with the goals of the Paris Agreement using forward-looking metrics.
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"Climate change is the greatest challenge of our time and capital markets participants are critical to driving the systemic transformation needed to avert climate catastrophe," MSCI global head of climate and ESG Remy Briand said.
"The Implied Temperature Rise metric is an important addition to our evolving suite of climate investing tools and builds on MSCI's mission to ensure capital markets and its participants can drive the transition to net zero. Investors are rapidly sharpening their focus on the financial impacts of climate change, and they need greater transparency and insight on whether their capital may further, or frustrate, the goal of a more sustainable society."
The product will be integrated into MSCI's Climate Value-at-risk offer, which it developed after acquiring Carbon Delta in 2019.