The New Index and Metrics was designed to allow institutional investors to measure their exposure to public companies whose products and services help address major social and environmental challenges. This new framework aligns with the UN’s sustainable goals adopted last September.
Linda-Eling Lee, Managing Director and Global Head of ESG Research, said, “This framework was developed following a client consultation with more than 25 of the world’s leading asset owners and managers, who agreed that there is room for new impact-oriented thematic investment approaches in public equity markets.
The SDGs aim to end poverty, protect the planet and ensure prosperity worldwide via a series of targets to be achieved by 2030. MSCI ESG Sustainable Impact Metrics groups the 17 SDGs into five actionable themes: basic needs, empowerment, climate change, natural capital and governance. The MSCI ACWI Sustainable Impact Index is designed to identify companies that have at least 50% of their revenues tied to products and services that address environmental and social challenges through the five themes, while achieving minimum environmental, social and governance standards through their operations.
For more than 40 years, MSCI’s research-based indexes and analytics have helped the world’s leading investors build and manage better portfolios. “Clients rely on our offerings for deeper insights into the drivers of performance and risk in their portfolios, broad asset class coverage and innovative research,” a press note stated. Its line of products and services includes indexes, analytical models, data, real estate benchmarks and ESG research.
MSCI serves 97 of the top 100 largest asset managers, based upon P&I data as of December 2014 and MSCI client data as of June 2015. http://www.businesswire.com/news/home/20160412005393/en/MSCI-ESG-Research-Develops-Framework-Support-Alignment
“To date, impact investing has largely been limited to small-scale, private equity strategies but there has not been a tool aiming to measure the extent to which exchange listed companies are involved in solutions for a more sustainable society and environment. The SDGs gave us the opportunity to offer tools to provide insight into what we define as Sustainable Impact”