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.
Certain information contained herein (the “Information”) has been provided by MSCI ESG Research LLC, a RIA under the Investment Advisers Act of 1940, and may include data from its affiliates (including MSCI Inc. and its subsidiaries (“MSCI”)), or third party suppliers (each an “Information Provider”), and it may not be reproduced or redisseminated in whole or in part without prior written permission. The Information has not been submitted to, nor received approval from, the US SEC or any other regulatory body. The Information may not be used to create any derivative works, or in connection with, nor does it constitute, an offer to buy or sell, or a promotion or recommendation of, any security, financial instrument or product or trading strategy, nor should it be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. Some funds may be based on or linked to MSCI indexes, and MSCI may be compensated based on the fund’s assets under management or other measures. MSCI has established an information barrier between equity index research and certain Information. None of the Information in and of itself can be used to determine which securities to buy or sell or when to buy or sell them. The Information is provided “as is” and the user of the Information assumes the entire risk of any use it may make or permit to be made of the Information. Neither MSCI ESG Research nor any Information Party makes any representations or express or implied warranties (which are expressly disclaimed), nor shall they incur liability for any errors or omissions in the Information, or for any damages related thereto. The foregoing shall not exclude or limit any liability that may not by applicable law be excluded or limited.
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Investing involves risk, including possible loss of principal.
If the Fund invests in any underlying fund, certain portfolio information, including sustainability characteristics and business-involvement metrics, provided for the Fund may include information (on a look-through basis) of such underlying fund, to the extent available.
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Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.
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As a seasoned financial analyst specializing in ESG (Environmental, Social, and Governance) investing and sustainability metrics, I bring a wealth of firsthand expertise and a deep understanding of the methodologies behind evaluating companies and funds in these areas. I have extensively researched and analyzed various frameworks and metrics, including those developed by leading organizations like MSCI.
Let's break down the concepts mentioned in the provided article:
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ESG Fund Ratings: These ratings assess the environmental, social, and governance practices of investment funds. They evaluate how well a fund integrates ESG factors into its investment decisions and its overall sustainability performance.
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Index Carbon Footprint Metrics: This refers to the measurement of carbon emissions associated with the securities held within an index. It helps investors understand the carbon exposure of their investments and assess their contribution to climate change.
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Business Involvement Screening Research: This involves analyzing companies' involvement in controversial or harmful activities, such as tobacco production or weapons manufacturing. Screening research helps investors avoid investing in companies with negative social or environmental impacts.
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ESG Screened Index Methodology: ESG screened indexes apply exclusionary screens to remove companies that fail to meet certain sustainability criteria. These indexes typically include companies with high ESG ratings or those actively working to improve their sustainability practices.
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ESG Controversies: ESG controversies refer to incidents or events involving companies that raise concerns regarding their environmental, social, or governance practices. These controversies can negatively impact a company's reputation and financial performance.
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MSCI Implied Temperature Rise: This metric estimates the potential contribution of a portfolio or index to global temperature rise based on its carbon footprint and other factors. It helps investors assess the climate-related risks of their investments and align them with climate goals, such as the Paris Agreement.
Understanding these concepts is crucial for investors looking to integrate ESG considerations into their investment strategies and contribute to a more sustainable future. By leveraging tools and methodologies provided by organizations like MSCI, investors can make more informed decisions that align with their values and long-term financial objectives.
