MSCI has launched its Climate Lab, a new application for enterprise-level monitoring and management of climate and financial risks for institutional investors.
The solution is built for those managing a large-scale transition of portfolios to meet net-zero goals as well as the underlying complex and vast amounts of data for analysis.
Climate Lab combines MSCI’s climate data and financial modelling capabilities across multiple asset classes on one platform to assess trends, identify leaders and laggards, and run scenario analysis from the enterprise to the issuer level.
More specifically, it will enable aggregation at the portfolio level of the recently released company Implied Temperature Rise and Target Scorecard. Investors will be able to monitor the forward-looking metric across all the funds they manage.
In addition, it allows investors to assess and manage portfolio alignment with the Paris Agreement as well as forecast enterprise climate emissions based upon issuer targets and explore forward-looking hypothetical scenarios.
Companies’ carbon budget can also be compared to their projected carbon emissions and investors can identify issuers that they may want to engage with on their climate and emissions strategies.
“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,” said Remy Briand, Global Head of ESG and Climate, MSCI.
He added, ” 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.”
Jorge Mina, Head of Analytics, MSCI, noted “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. 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.”
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