MSCI has launched Climate Lab, an application to enable investors to track companies’ net zero progress.
The tool uses MSCI’s climate modelling, financial risk management and portfolio analytics and shows how well a portfolio is aligned with climate targets. It allows access to data on scope one, two and three carbon emissions, temperature alignment, company net zero targets, and scenario analysis.
MSCI said Climate Lab is aimed at institutional investors managing a large-scale transition of portfolios to net zero and will help assess trends and identify leaders and laggards across asset classes. It has a functionality to forecast enterprise climate emissions and explore forward-looking, hypothetical scenarios.
The application makes use of data from MSCI’s Implied Temperature Rise solution which allows the calculation of the implied temperature rise of equity portfolios. This offering from MSCI was launched last month and helps investors analyse the pace at which their portfolio holdings are transitioning their businesses to meet climate goals.
Remy Briand, global head of ESG and climate at MSCI, stressed the importance of investment decisions for the world meeting its climate goals: “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.”
Briand said Climate Lab allows investors to transition their existing investment strategies to net-zero and gives business leaders a “new level” of transparency and coordination for making climate progress across their organisation.
MSCI head of analytics, Jorge Mina, said: “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.”