Review the MSCI methodology behind the Sustainability Characteristics and Business Involvement metrics: 1ESG Fund Ratings; 2Index Carbon Footprint Metrics; 3Business Involvement Screening Research; 4ESG Screened Index Methodology; 5ESG Controversies; 6MSCI Implied Temperature Rise
For funds with an investment objective that include the integration of ESG criteria, there may be corporate actions or other situations that may cause the fund or index to passively hold securities that may not comply with ESG criteria. Please refer to the fund’s prospectus for more information. The screening applied by the fund's index provider may include revenue thresholds set by the index provider. The information displayed on this website may not include all of the screens that apply to the relevant index or the relevant fund. These screens are described in more detail in the fund’s prospectus, other fund documents, and the relevant index methodology document.
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I am a seasoned expert in the field of Environmental, Social, and Governance (ESG) investing, with a profound understanding of the methodologies employed by prominent organizations such as MSCI. My comprehensive knowledge is rooted in practical experience and an in-depth study of sustainable investment practices.
In the realm of ESG investing, MSCI plays a pivotal role in providing valuable metrics to evaluate the sustainability characteristics and business involvement of funds and indices. Let's delve into the concepts mentioned in the provided article:
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ESG Fund Ratings:
- MSCI employs a robust methodology to assess and rate ESG funds based on environmental, social, and governance criteria. These ratings provide investors with insights into the sustainability performance of a fund.
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Index Carbon Footprint Metrics:
- MSCI calculates the carbon footprint of indices, offering investors a clear understanding of the environmental impact of their investment portfolios. This includes measuring the greenhouse gas emissions associated with the underlying assets.
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Business Involvement Screening Research:
- MSCI conducts thorough business involvement screening research to identify and assess the level of involvement of companies in controversial or undesirable activities. This is crucial for investors looking to align their investments with ethical and sustainable principles.
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ESG Screened Index Methodology:
- MSCI defines and implements methodologies for constructing ESG screened indices. These indices exclude companies that do not meet predefined ESG criteria, providing investors with a tool to align their portfolios with sustainability goals.
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ESG Controversies:
- MSCI tracks and reports ESG controversies, alerting investors to any ethical or sustainability issues associated with the companies in which they are invested. This transparency helps investors make informed decisions aligned with their values.
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MSCI Implied Temperature Rise:
- MSCI calculates the implied temperature rise associated with investment portfolios. This metric estimates the potential temperature increase resulting from the carbon emissions of the companies within a portfolio, aiding investors in understanding the climate impact of their investments.
The article emphasizes the importance of considering corporate actions and situations that may lead a fund or index to hold securities that do not comply with ESG criteria. It also highlights the role of revenue thresholds set by the index provider in the screening process.
Additionally, the disclaimer underscores the data's origin from MSCI ESG Research LLC and the need for permission to reproduce or redisseminate the information. It also points out that the information is not approved by regulatory bodies and should not be the sole basis for investment decisions.
The regulatory information provided by BlackRock Advisors and the associated risk warnings emphasize the need for investors to carefully consider the suitability of investments, past performance, and potential fluctuations in the value of investments. This thorough disclosure ensures that investors are well-informed and make decisions aligned with their financial goals and risk tolerance.
