MSCI has expanded its MSCI ESG Research coverage to include approximately 21,000 mutual funds and exchange traded funds (ETFs).
MSCI ESG Fund Metrics will measure the Environmental, Social and Governance (ESG) characteristics of portfolio holdings and rank or screen funds based on a diverse set of factors including sustainable impact, values alignment and ESG risks, including carbon footprint.
“The development of Fund Metrics was based on client consultation, which included some of the world’s largest wealth managers who are looking for greater insight into the ESG attributes of their portfolios, reflecting growing attention to ESG among investors,” says Eric Moen, Managing Director of MSCI ESG Research. “The demand from clients who want to consider ESG criteria to align their investments with their values is continuously increasing. Fund Metrics is a natural extension of our ESG ratings and research, adding even more transparency as the sustainable investing movement gains momentum.”
Each fund will receive an overall score, the Fund ESG Quality Score, a peer group percentile rank and individual E- S- and G- Scores. The ESG Quality Score reflects the ability of the underlying holdings to manage medium- to long-term risks and opportunities. Clients will also have access to over 100 Fund Metrics to evaluate the ESG attributes of their portfolio and fall into three categories: sustainable impact, values alignment and risks.
“Transparency around the ESG Quality of a fund’s holdings may be used by clients to complement their evaluation and due diligence of fund managers but it does not provide an indication of the quality of a fund manager’s ESG strategy, capabilities, process or intentionality,” adds Moen.
MSCI ESG Fund Metrics will be available directly from MSCI ESG Research and on third-party platforms through 2016.
MSCI ESG Research is the world’s largest provider of ESG ratings, research and data. Some of the largest wealth managers and 47 of the top 50 global asset managers incorporate MSCI ESG Research into their investment-decision making process.
Anna Snider, head of due diligence for Merrill Lynch Global Wealth and Investment Management CIO Office, says: “Merrill Lynch is committed to providing innovative impact investing solutions. We are delighted to see that MSCI ESG Research now provides tools designed to assist with fund due diligence and monitoring on ESG and Impact characteristics.”
Sasja Beslik, head of responsible investment at Nordea Asset Management, says: “We are committed to providing our clients with greater visibility of the long term risks to their portfolios. It is great to see MSCI ESG Research offer more tools designed to bring greater fund-level transparency and assist with measuring a portfolio on a diverse set of ESG characteristics."
In a statement, Credit Suisse, says: “The demand from clients who want to consider ESG criteria and wish to align their investments with their values is continuously increasing. We help them better assess ESG related risks to ultimately achieve a sustainable impact through their investments – without compromise on the performance side. We are delighted to see MSCI ESG Research now offer more tools designed to bring great transparency to portfolios.”