MSCI Inc (NYSE: MSCI), a provider of investment decision support tools and services, has launched an MSCI Climate Lab, a new application for enterprise-level monitoring and management of climate and financial risks for investors.
Combining MSCI’s strengths in climate modelling, financial risk management and portfolio analytics, the application provides investors with the data and tools they need to track and assess companies’ progress towards net-zero commitments and align their portfolios with climate targets for a net-zero future.
MSCI Climate Lab arrives at a critical time as large institutional investors increasingly look to align capital with net-zero targets and steer the world onto a path towards a sustainable future. With Climate Lab, MSCI introduces a solution built for institutional investors managing a large-scale transition of portfolios to meet net-zero goals and to manage the underlying complex and vast amounts of data supporting the analysis of those portfolios.
Climate Lab combines MSCI’s climate data and financial modelling capabilities across multiple asset classes on one easy-to-use platform to assess trends, identify leaders and laggards, and run scenario analysis from the enterprise to the issuer level. In particular, MSCI Climate Lab will enable aggregation at the portfolio level of the recently released company Implied Temperature Rise solution. Investors will be able to monitor the forward-looking metric across all the funds they manage.
“The decisions of the financial industry will influence the economic transition towards the net-zero revolution and will permanently change how we allocate capital and manage investment strategies. However, net-zero strategies and commitments will bring a new set of challenges, not just in the shifting allocation of capital, but in garnering insight on portfolios from the data needed to support the investment process and in the business-wide transition to net-zero,” says Remy Briand, Global Head of ESG and Climate, MSCI.
“With Climate Lab, investors finally have the tools to transition their existing investment strategies to net-zero. For chief executives and business leaders, the solution brings a new level of transparency and coordination that ensures crucial climate progress is being made across every level of the organisation. This is a vital step in making the net-zero revolution a reality.”
MSCI Climate Lab enables investors to:
• Access market-leading climate data across multiple asset classes, including data on carbon emissions (Scope 1, 2 and 3), temperature alignment, company net -zero targets, and scenario analysis;
• Access datasets and analysis from MSCI’s robust climate solutions toolkit, including the recently launched Implied Temperature Rise and Target Scorecard;
• Identify and understand climate risk exposures and trends at the enterprise level across all your funds and portfolios;
• Assess and manage portfolio alignment with the Paris Agreement;
• Forecast enterprise climate emissions based upon issuer targets and explore forward-looking hypothetical scenarios; and
• Compare companies’ carbon budget to their projected carbon emissions and identify issuers that they may want to engage with on their climate and emissions strategies.
“Many of the world’s largest institutions are repositioning their portfolios to meet climate targets, and up until now the technology has not been in place to allow for a swift, scalable and effective understanding and management of climate exposure across all funds and portfolios. At MSCI, we are focused on turning large datasets into actionable insights that our clients can apply across their portfolios. On average, we process 70 million positions and one trillion asset valuations daily,” says Jorge Mina, Head of Analytics, MSCI. “Climate Lab brings together the climate, analytical and technological capabilities of MSCI for clients to immediately start monitoring and managing their own net-zero transitions.”
