Managing a Financial Portfolio’s Climate Exposure

So far, disclosures of companies’ carbon emissions and decarbonization targets were driven more by shareholders than by regulators. Data availability has improved over time but remains sparse, especially for scope 3 (value-chain) emissions. Comparability of this data is a challenge for investors, which stands in the way of choosing the companies best equipped to outperform peers in a decarbonizing economy. This will change this year, as regulators and standard setters around the world tell corporates how to disclose their exposure to and impact on climate change. An important element of these emerging standards relates to forward-looking data, e.g. climate targets and scenario analysis. MSCI – a leading ESG & Climate data provider – serves the largest investors globally with relevant data to measure their portfolio’s financial carbon footprint and future exposure to climate risks.