It’s August, which means many of us might finally have time to catch up on some reading. From the frontiers of sustainable finance to transformative thinking and climate progress in Asia, here are some of my favorite reads of the year so far. Enjoy them wherever your downtime may take you.
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Theory Meet Practice: Conversations from the frontiers of sustainable finance
What impact can sustainability-minded CEOs have on the bottom line? When does irrationality creep in to decision-making? Why are ESG ratings like snacks? Every time we sit down with a leading academic at the forefront of sustainable finance we learn something that translates research to practice and makes us feel smarter about opportunities to create sustainable value. You will too.
Reality Checking Sustainable Finance: Top takeaways from our live event
If you’ve wondered how Earth’s biggest investors are surfacing the real drivers of long-term value, read these evidence-based insights from key leaders in finance, academia and business. Together they untangle the latest data on sustainability and performance, explore divergence in ESG ratings, examine the role of diversity in creating value, and address misconceptions that have set sustainable investing up for self-reflection.
Carbon Footprinting Demystified
What are the best metrics for measuring your portfolio’s carbon footprint? That depends on the climate reporting standard your follow and your investment objectives, suggest my colleagues Carrie Wang, Guido Giese and Xinxin Wang. This guide will help you navigate the jungle of footprinting methods so you can choose the right inputs for calculating the carbon footprints of assets from equities and debt to commercial real estate, securitized products and cash. (The guide updates MSCI’s “Carbon Footprinting 101,” which was published in 2015.)
Financing the Climate Transition
The term “transition finance” has become a catchall for strategies necessary to move toward a future free of fossil fuels. My colleagues Guido Giese, Elchin Mammadov, Manish Shakdwipee and Kumar Neeraj show how combining an approach that aims to finance the transition with one focused on portfolio decarbonization can help investors minimize potential trade-offs between achieving their climate and financial goals.
Net Zero in the Balance: A Guide to Transformative Industry Thinking
Plenty of guides to net-zero investing recommend a series of actions. This one offers a mindset for contextualizing climate within a fiduciary framework. “Seeing the wholes and not just the parts, interrelationships rather than things, and patterns of change rather than static snapshots,” can help investors develop a view of the wider ecosystem of transition finance “that reflects reality more closely than the traditional framing in investment theory,” writes editor Roger Urwin, who pairs systems thinking with a wealth of practitioner insights.
APAC Climate Action Progress Report
No region matters more in the transition to a net-zero world than the Asia-Pacific region, where the threat of climate change juxtaposes the region’s vulnerability to extreme heat and coastal flooding with an economy that relies heavily on fossil fuels (and contributed 40% of global greenhouse gas emissions in 2023). This compilation from MSCI’s Xiaoshu Wang and her team quantifies the investment impact of Asia’s rising temperatures, catalogs national climate plans, runs down the latest data on climate disclosure and target-setting by APAC region companies, details the decarbonization of the region’s energy mix, and inventories corporate investments and innovation in clean technology. If you want to get a handle on the low-carbon transition in Asia, download this.
Unavoidable Opportunity: How to make climate adaptation and resilience investable
The impacts of climate change are increasingly inevitable, bringing with them demand for products and services that can help society withstand the effects of a warming planet. Researchers from the investor-led Global Adaptation and Resilience Working Group and our Institute harnessed a large language model to surface companies in every region whose businesses span activities ranging from water-efficient agriculture and supply chain resilience to weatherization of power infrastructure and buildings. The analysis is one of the first demonstrations of the investability of climate adaptation and resilience and may be the first use of artificial intelligence to prototype an investable universe of companies from among them.
The MSCI Sustainability Institute Net-Zero Tracker: Financing the low-carbon transition
Everyone talks about climate transition finance, but how do we define it? The latest edition of our Net-Zero Tracker examines low-carbon transition finance through three lenses: the Net Zero Investment Framework developed by the Paris Aligned Investment Initiative; the number of companies setting science-based climate targets; and temperature alignment metrics used by investors. Though the indicators examined in the report each answer different questions, together they tend to show that the world’s listed companies remain largely off track when it comes to alignment with global goals.