MSCI launches corporate tool to rate sustainability against peers

By Laura Miller

MSCI has launched a tool for companies to analyse their sustainability strategy against their peers.

MSCI Corporate Sustainability Insights gives executives at companies tracked by MSCI ESG Research the ability to measure and compare their ESG and climate data versus peers.

It is designed to increase corporate sustainability executives’ understanding of the ESG and climate challenges and opportunities facing their companies.

The tool can identify potential disclosure gaps in carbon-related commitments, using charts, graphs, and maps, and support strategic planning.

It will analyse a company’s ESG ratings, ESG controversies, and sustainable development goals net alignment profiles.

See also: – MSCI’s Vanston: Mandatory climate targets needed as listed companies on course for 2.9°C

Climate-related risks and opportunities can be compared with industry peers, based on the recommendations from the Taskforce on Climate-related Financial Disclosures (TCFD).

Risk exposure and alignment with global temperature goals will be measured using MSCI ESG Research’s climate value-at-risk and implied temperature rise solutions.

Beth Byington, global head of corporate ESG and climate solutions at MSCI, said: “The ESG and climate needs of companies have evolved dramatically as new reporting requirements from regulators and institutional investors have emerged in recent years.

“It is now more important than ever for listed companies to speak a common language with these audiences about financial opportunities and risks associated with subjects like climate change.”

The rising importance of ESG for investors and companies in recent years, as well as the higher level of regulatory reporting requirements, has led to greater data disclosure and dissemination from companies themselves to MSCI ESG Research.

In 2022, 3,989 companies (43%) in the MSCI ACWI Investible Market Index interacted directly with MSCI ESG Research, the ratings company said.

As regulators have begun mandating alignment with the requirements of the Taskforce for Climate-related Financial Disclosures (TCFD), more companies are also making net-zero pledges. As at March 2022, 1,330 of the more than 2,900 constituents of the MSCI ACWI Index had set emission-reduction targets.

Companies are also increasing their climate-related data disclosures in lock step with institutional investors that are moving towards net-zero and other ESG and climate investing goals.

The number of data points related to climate change that companies submitted to MSCI ESG Research rose from 9,914 to 14,648 between 2021and 2022.