Sustainable Investment Awards 2022

ESG assessment tool of the year, investment: MSCI ESG Research's Implied Temperature Rise

MSCI ESG Research calls its Implied Temperature Rise model "a powerful, forward-looking tool" that helps investors assess companies' progress toward net-zero targets.

Launched in September in the run-up to COP26, the MSCI ESG Research's Implied Temperature Rise product is designed to help investors contribute to the global effort to limit temperature change to 1.5°C above pre-industrial levels, it said.

Implied Temperature Rise reviews a company's existing and projected carbon dioxide emissions, considering the company's reduction targets, and estimates the future global temperature rise aligned with that company's activities.

In October, it made the Implied Temperature Rise of more than 2,900 companies, which were constituents of the MSCI All-Country World Index, publicly available on its website, "to allow investors access to the data and transparency required to navigate their transition to net-zero".

Projections are calculated by allocating a share of the global carbon budget to each listed company.

The data and research provider added that the model responded to an urgent need for standardised and accessible data on companies' initiatives to meet global decarbonization goals.

It noted that the recommendations of the Task Force on Climate-related Financial Disclosures ask that financial institutions plot their progress in decarbonising their portfolios. MSCI ESG Research claims that the model "is aligned with" 20 of the 22 recommendations from the TCFD's portfolio alignment team.

One Environmental Finance Awards judge praised the model's focus on global temperature rise. Another judge said it was a good example of bringing something scalable to market quickly.