To mark the Institute’s launch, we are investigating three key questions. We are examining them with collaborators from across the sustainable-finance ecosystem, leveraging MSCI’s experience in developing new ways to measure both financial and extrafinancial factors.

Soon, delegates from nearly 200 countries, investors, business leaders, policymakers, activists and members of civil society will gather in Dubai for the COP28 climate conference. There they will take stock of action to combat climate change with the aim of boosting the immediacy and ambition of those efforts.

The Institute and its partners are pursuing a series of initiatives designed to advance those aims. They include our teaming with investment firm Galvanize Climate Solutions to explore investment pathways to speed deployment of technologies that help decarbonize the most stubbornly emissive industries such as cement, steel and chemicals.

We are analyzing simulated impacts of the early phasing out of coal-fired power plants in the Asia-Pacific region to underpin guidance from the Glasgow Financial Alliance for Net Zero. We are probing new frontiers in carbon accounting, starting with an initial examination and debate on an exploratory approach to accounting for supplier emissions developed by Professors Robert Kaplan and Karthik Ramanna.  And we are at work on a forthcoming edition of the award-winning MSCI Net-Zero Tracker that will compare how climate action by companies stacks up to that of their governments – a private sector global stocktake ahead of COP28.

Though a large and growing body of academic research examines corporate sustainability factors, investors can struggle to understand which insights tie to financial performance in ways that should shape their decisions about allocating capital. The Institute aims to highlight the most practitioner- relevant academic research into the relationship between sustainability factors and the value of financial assets, risk and performance. We are curating a searchable repository, which we will regularly update and expand with expert input, that will gather a diversity of studies examining sustainability in the context of investment strategy.

To help bridge the gap between theory and practice, the Institute will equip academic and policy researchers with sustainability data, metrics and models that investors use to inform decision-making. We also plan to collaborate with select academic institutions, including Stanford University’s Graduate School of Business, to host seminars that help academic researchers keep abreast of the rapidly evolving investor uses for new climate metrics.

The perils of an overheating planet demonstrate a growing need for climate-proofing our built environment, nature-based solutions, policy and other mechanisms that can improve the ability of communities to withstand a changing environment. While investor focus on decarbonization has ramped up dramatically in recent years, there is as yet comparatively little attention in capital markets to climate resilience.¹The lion’s share of global climate finance focuses only on mitigation. “Tracking Investments in Climate Resilient Infrastructure.” Climate Policy Initiative, December 2022. Decarbonization and climate resilience are entwined, and our economy and society will need to rapidly adjust to both imperatives in the coming decades.

The Institute is providing analytical support to the investor-led Global Adaptation and Resilience Investment Working Group (GARI) for an initiative to redefine and demonstrate climate resilience as an attractive theme to consider for private investment. The initiative, which is supported by the Bezos Earth Fund and ClimateWorks Foundation, is designed to channel capital toward investment strategies that can produce a climate-resilient transition.