MSCI launches tool to weigh ESG plans against corporate peers

Called MSCI Corporate Sustainability Insights, it also gives listed companies access to ESG metrics to set goals and track progress.

It is designed to be used by sustainability executives, to improve their understanding of the ESG and climate challenges and opportunities facing their companies.

The tool tracks a company’s ESG ratings, controversies, and sustainable development goals net alignment profiles, to help with strategic planning and drive investor engagement.

Companies can see their risk exposure and alignment with global temperature goals through MSCI ESG Research’s climate value-at-risk and implied temperature rise solutions.

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It can also help in identify a company’s disclosure gaps in carbon-related commitments through the MSCI Target Explorer tool.

Climate-related risks and opportunities are compared with industry peers, based on the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD).

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 from companies to MSCI ESG Research.

In 2022, 3,989 companies (43%) in the MSCI ACWI Investible Market Index interacted directly with MSCI ESG Research, according to the research firm.

As regulators have begun mandating TCFD-aligned rules, more companies are also making net-zero pledges. 

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As of March 2022, 1,330 of the more than 2,900 constituents of the MSCI ACWI Index had set emission-reduction targets, according to Morningstar data.

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 2021 and 2022.

Beth Byington, global head of corporate ESG and climate solutions at MSCI, said: “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. 

“We hope these deeper insights will allow them to take quick, decisive action to meet their unique sustainability goals.”