Index provider MSCI has released an application designed to help fund managers monitor climate-related risks across their portfolios.
The MSCI Climate Lab has been launched to capitalise on the growing trend among institutional investors to align their portfolios with the transition to net zero.
According to MSCI, the product uses its climate data and financial modelling on a single platform to run scenario analysis across multiple asset classes and funds.
“The decisions of the financial industry will influence the economic transition towards the net-zero revolution and will permanently change how we allocate capital and manage investment strategies,” said Remy Briand, global head of ESG and climate, MSCI.
“However, net-zero strategies and commitments will bring a new set of challenges, not just in the shifting allocation of capital, but in garnering insight on portfolios from the data needed to support the investment process and in the business-wide transition to net-zero.”
Data has been identified as one of the biggest obstacles facing firms’ efforts to manage climate change risk. In a survey of UK financial services firms by Willis Towers Watson carried out in May, 80% of respondents cited data as their top concern in the transition to a net zero economy while difficulty in making quantitative assessments (75%) and insufficient expertise (62%) also featured highly.
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