MSCI ESG Research LLC
Climate Impact & Sustainability Data (2006-2019)
Reporting Period: 2006-2019
Environmental Metrics
ESG Focus Areas
- Environmental
- Social
- Governance
Climate Goals & Targets
Environmental Challenges
- Varying ESG methodologies used in studies lead to differing results on ESG's impact on stock performance.
- The diverse nature of ESG topics makes it difficult to assess their equal impact on company performance.
- Different approaches to constructing company ESG scores, involving various combinations of financial and non-financial inputs.
Mitigation Strategies
- Employed MSCI ESG Ratings, using Environmental, Social, and Governance pillar scores and underlying Key Issues scores for a more granular analysis.
- Identified three economic transmission channels (cash-flow, idiosyncratic risk, and valuation) through which ESG information is conveyed to financial risk and performance.
- Analyzed the transmission channels using MSCI ESG Ratings for the MSCI World Index from 2006 to 2019, and a larger universe for ESG pillar and Key Issue scores from 2012 to 2019.
- Created size-adjusted scores to control for size effects.
- Used MSCI’s Global Equity Model for Long-Term Investors (GEMLT) for risk, return attributions, and factor calculations.
Supply Chain Management
Climate-Related Risks & Opportunities
Reporting Standards
Frameworks Used: MSCI ESG Ratings