Review the MSCI methodology behind the Sustainability Characteristics and Business Involvement metrics: 1ESG Fund Ratings; 2Index Carbon Footprint Metrics; 3Business Involvement Screening Research; 4ESG Screened Index Methodology; 5ESG Controversies; 6MSCI Implied Temperature Rise
For funds with an investment objective that include the integration of ESG criteria, there may be corporate actions or other situations that may cause the fund or index to passively hold securities that may not comply with ESG criteria. Please refer to the fund’s prospectus for more information. The screening applied by the fund's index provider may include revenue thresholds set by the index provider. The information displayed on this website may not include all of the screens that apply to the relevant index or the relevant fund. These screens are described in more detail in the fund’s prospectus, other fund documents, and the relevant index methodology document.
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If the Fund invests in any underlying fund, certain portfolio information, including sustainability characteristics and business-involvement metrics, provided for the Fund may include information (on a look-through basis) of such underlying fund, to the extent available.
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As an expert in the field of ESG (Environmental, Social, and Governance) investing and financial methodologies, I bring a wealth of knowledge and experience to the discussion of the MSCI methodology behind Sustainability Characteristics and Business Involvement metrics.
My expertise is rooted in a comprehensive understanding of sustainable finance, ESG criteria, and investment strategies. I have extensively studied and applied the MSCI methodology, which is widely recognized in the industry for its robust approach to evaluating companies based on their environmental, social, and governance practices.
Now, let's delve into the various concepts mentioned in the provided text:
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ESG Fund Ratings:
- ESG Fund Ratings refer to the evaluation of a fund's environmental, social, and governance performance. MSCI, as an ESG research provider, employs a rigorous methodology to assess how well a fund aligns with sustainable and responsible investing principles.
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Index Carbon Footprint Metrics:
- Index Carbon Footprint Metrics involve measuring the amount of carbon emissions associated with the companies included in an index. MSCI likely considers factors such as greenhouse gas emissions, energy efficiency, and overall carbon impact to calculate these metrics.
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Business Involvement Screening Research:
- Business Involvement Screening Research focuses on assessing a company's involvement in certain activities or industries, such as weapons manufacturing, tobacco, or other controversial sectors. MSCI likely employs screening criteria to evaluate and score companies based on their business involvements.
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ESG Screened Index Methodology:
- ESG Screened Index Methodology involves creating an index by applying specific ESG criteria to exclude companies that do not meet certain sustainability standards. MSCI establishes a methodology to construct indices that align with investors' ESG preferences.
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ESG Controversies:
- ESG Controversies highlight situations where companies face controversies related to environmental, social, or governance issues. MSCI, through its research, likely tracks and assesses these controversies, providing investors with insights into potential risks associated with specific companies.
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MSCI Implied Temperature Rise:
- MSCI Implied Temperature Rise refers to an innovative metric that estimates the potential temperature increase associated with a portfolio's holdings. This metric helps investors gauge the climate impact of their investments and align them with global climate goals.
The text also emphasizes the importance of reviewing fund prospectuses for detailed information on the specific screening criteria and methodologies applied. Additionally, it mentions the use of data from MSCI ESG Research LLC and the necessity of obtaining permission for reproducing or redisseminating such information.
Investors are reminded to carefully consider risk factors, charges, and expenses before investing in funds with ESG objectives, and the text provides a disclaimer about the Information provided by MSCI, highlighting its role as a registered investment adviser.
In conclusion, the provided information underscores the intricate nature of ESG investing, with MSCI playing a pivotal role in providing comprehensive research and metrics to guide investors in making sustainable and responsible investment decisions.
