Climate Change Indexes

Enabling investors to build more climate resilient portfolios

The MSCI Climate Change Indexes consider both the opportunities and risks associated with transition to a low carbon economy, enabling institutional investors and wealth managers to integrate climate risk considerations in their global equity investment process. The indexes are designed to exceed the minimum requirements of the EU Climate Transition Benchmark minimum requirements.

KEY POINTS OF MSCI CLIMATE CHANGE INDEXES:

The methodology uses the MSCI Low Carbon Transition¹ (LCT) score and category to reweight constituents of a parent index to increase its exposure to companies participating in opportunities associated with transition and decrease its exposure to companies exposed to risks associated with transition.

The indexed applies an heuristics-based approach in order to meet the following objectives

Reduce Emissions

• Minimum 30% reduction in Greenhouse Gas (GHG) Intensity (Scope 1+2+3¹) relative to the Reference Index
• Potential emission intensity 30% lower
• Neutral exposure to high impact sector¹
• Incentivize companies setting targets

Green Opportunities

• Increases weight in companies which see opportunities from climate transition
• 3x category tilt score for companies in Solutions LCT Category (green companies) to the parent index

Decarbonization

• Annual decarbonization at 7% starting June 1^st 2021 (base date)

EU Commission’s Delegated Acts for Climate Transition and Paris Aligned benchmarks
1 –Equity Climate Change Indexes only Full methodology: MSCI Climate Change Indexes Methodology

Factsheet

Methodology