Index provider MSCI has called on investors to more readily integrate environmental, social and governance (ESG) criteria throughout their investment processes.
The firm has published a framework of steps that investors “can and should” undertake to improve practices for ESG integration across the investment value chain.
MSCI chairman and chief executive Henry Fernandez said: “The world is rapidly evolving due to dramatic environmental, social and governance shifts, including the effects and implications of climate change and the move to a low carbon economy, which will significantly impact the pricing of financial assets and the risk and return of investments, and lead to a large-scale re-allocation of capital over the next few decades.”
Implementing ESG criteria is necessary to mitigate risk, identify opportunities, and contribute towards the transition to a sustainable economy, according to MSCI.
The firm’s head of ESG, Remy Briand, said: “Sustainable investing is a critically important part of the long-term investment process.”
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