MSCI launches climate risk assessment tool

MSCI launches climate risk assessment tool
Product measures potential impact of climate change on company valuations
FEB 05, 2020

Index provider MSCI has created a tool designed to measure the potential impact of climate change on company valuations.

The MSCI Climate Value-At-Risk, or Climate VaR, from MSCI ESG Research is designed to help investors assess their exposure to climate-related risks and opportunities. The company said the tool provides financial institutions with “the means to identify assets that may be at risk from the worst effects resulting from climate change, while helping to identify innovative low-carbon investment opportunities, through security-specific modelling.”

The product covers more than 10,000 companies, assessing all their associated equities and corporate bonds within the analysis, the company said in a release.

“Analysis reveals that nearly 7% of global facilities owned by MSCI ACWI Index constituents are threatened by coastal flooding risk and nearly 62% of index constituents had at least one facility in a flood-prone area, underlining the importance for investors in considering these risks and integrating this information into their investment decision-making,” MSCI said.

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