Index provider MSCI has launched a tool to help investors assess their exposure to climate-related risks and opportunities.
The solution provides insights into the potential stressed market valuation of portfolios and downside risks, translating climate-related costs into potential valuation impacts, according to the firm.
The MSCI Climate Value-At-Risk tool covers over 10,000 companies, assessing all their associated equities and corporate bonds within the analysis.
Remy Briand, head of environmental, social and governance at MSCI, said: “The world’s attitude to climate change is rapidly evolving due to dramatic environmental, social and governance shifts driving a move to a low-carbon economy.
“As we reach this inflection point, investors are now publicly expressing a desire to take action and address the urgent reality of climate change themselves, and they are also urging others in the investment industry to do so too.”
MSCI’s solution has four main applications for investors: policy transition scenarios, innovation transition scenarios, portfolio warming potential, and physical risks and opportunities.
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