MSCI launches low carbon indices

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MSCI has announced the launch of a series of low carbon indices, which have been sought out by institutional investors looking for exposure to companies emitting less carbon than peers.

The MSCI Global Low Carbon Leaders indices have been developed with feedback from the likes of AP4 in Sweden, Fonds de Réserve pour les Retraites (FRR) and Amundi. MSCI also consulted other investors globally on the relevant methodology.

The new indices are based on the existing MSCI ACWI Index, which covers developed and emerging markets. The index series uses MSCI ESG CarbonMetrics data from MSCI ESG Research, and measures both carbon emissions and fossil fuel reserves to arrive at data points.

The indices therefore enable users to limit the exposure to carbon risk in their portfolios, MSCI said, while still ensuring a wider market exposure with an eye to minimising tracking error compared to the parent standard indices.

AP4 said it would invest up to €1bn in the new indices together with partners. FRR said it would invest €1bn, while Amundi confirmed it has licensed use of the new indices.


Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

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