MSCI's Glidepath Bond Indexes introduce a novel framework for reallocating cash flows within fixed income benchmarks, gradually increasing exposure to issuers aligned with greenhouse gas decarbonization targets, green revenues, or other sustainability criteria.

While the cash component of an index is typically reallocated in proportion to that index's weight, MSCI's 'glidepath' approach uses a combination of 'target factors' to gradually transition the index from a replica of a parent index towards one with improved climate characteristics based on certain predefined factors.

The value of deletions from the index are treated as principal payments reallocated to the portion of the index with the best composite scores. New securities are over- or under-weighted based on the composite score, with those securities from issuers scoring better on climate receiving a bigger weight in the index. 'Misaligned' issuers are not excluded but their weightings are systematically reduced to reflect their relative positioning on key environmental factors.