Sustainable Investment Awards 2023

ESG assessment tool of the year - ratings: MSCI ESG Ratings; ESG data initiative of the year: MSCI Net-Zero Tracker

Winning this year's award for 'ESG assessment tool of the year – ratings', MSCI ESG Ratings are designed to measure a company's resilience to financially-material environmental, societal, and governance risks and opportunities.

In 2022, the firm expanded its ESG Ratings model to over 1,400 ESG and climate data points, drawing from 20 datasets including alternative data and models. It also boosted its use of new technology and artificial intelligence with the aim to increase the precision of data collection, analysis, and validation of the data.

One Sustainable Investment Awards judge said: "The expansion of coverage was notable and important."

MSCI also launched a new Corporate Sustainability Insights module on MSCI ONE, a new central hub for collecting and distributing data, with the aim to simplify corporates' ability to verify data and view insights. In 2022, roughly 4,000 companies (43%) of the MSCI All-Country World Index constituents interacted directly with MSCI ESG Research.

MSCI also rolled out an expanded ESG data ecosystem with Geoquant and Elevate third-party datasets offering clients geopolitical risk and supply chain risk insights and introduced provisional MSCI ESG Ratings for private assets.

In a drive to increase transparency, MSCI made its ESG Ratings methodology publicly available and updated its ESG Ratings Search tool for 2,900 companies and ESG Fund Rating Search tool for 56,000 equity and fixed income funds. For example, data on Implied Temperature Rise for all companies and funds are now included.

As of February 2023, MSCI says its ratings cover 10,800 corporate and sovereign issuers directly researched and 17,000 issuers including subsidiaries, adding 700 issuers during the year.

Laura Nishikawa, global head of ESG research at MSCI, said: "We provide research-led tools and solutions that enable our clients to meet their unique sustainable investment objectives. Our ESG Ratings play an instrumental role in this endeavour, helping investors make informed decisions about material risks and opportunities.

"We are thrilled that ESG Ratings has won ESG assessment tool of the year. The award serves as an acknowledgment of our team's dedicated effort to equip institutional investors with a complete view of their portfolios, enabling them to capture opportunities and manage risks in an ever-evolving investment landscape."

Also winning the award for 'ESG data initiative of the year' for the MSCI Net-Zero Tracker tool, the tracker shows that listed companies were emitting greenhouse gases at a rate that would increase average global temperatures this century by 2.9oC above preindustrial levels, nearly double the threshold set by the Paris Agreement.

It is designed to offer investors, companies, financial intermediaries, and policymakers a gauge of the contribution of the world's listed companies to global carbon emissions and their progress toward a net-zero economy.

MSCI has published three issues of the Net-Zero Tracker report over the last 12 months including a spotlight on coal and another on the interrelationship between climate change and nature-related loss in the run-up to both the COP27 climate conference in Sharm el-Sheikh and the COP15 biodiversity conference in Montreal.

Oliver Marchand, global head of climate research at MSCI, stated: "What especially sets MSCI apart is our ability to make data decision-useful.

"Our Climate Risk Center brings together some of the best minds in quantitative finance and climate science to develop solutions that help our clients understand and manage climate change.

"The MSCI Net-Zero Tracker uses our innovative Implied Temperature metric to clearly show the difference between corporate climate goals and the actions needed to limit global warming."