Catch up on climate

Green and Intelligent: The Role of AI in the Climate Transition. The study from British economist Nicholas Stern and his colleagues finds that AI can contribute 3.2–5.4 GtCO₂e in annual emissions reductions by 2035, from just three sectors alone: power, food, and light road vehicles. This exceeds the estimated 0.4–1.6 GtCO₂e annual emissions increase from all AI-related energy use globally. We recommend the authors’ list of references, which include “Accelerating Climate Action with AI,” a 2023 report co-published by Boston Consulting Group and Google that offers a primer on how AI can improve climate modeling and enhance adaptation and resilience efforts.

Strengthening the investment case for climate adaptation: A triple dividend approach. Authors Carter Brandon, Bradley Kratzer, Aarushi Aggarwal and Harald Heubaum analyzed 320 adaptation investments across 12 developing countries, compiling a database of each project’s objectives, components, costs and benefits. The investments delivered an average return of 27% (total project growth), find the authors, who quantify value across three dimensions (or “dividends”): avoided losses, induced economic benefits (above baseline), and social/environmental benefits.

Climate Adaptation and Resilience. This guide from the UN Principles for Responsible Investment offers a helpful place to start on this critical topic. In addition to defining climate adaptation and resilience and its relevance for investors, the guide walks through its integration into the investment process, as well as key steps investors can take in stewardship and disclosure. The guide includes links to further reading and industry initiatives, including two, the @Global Adaptation and Investment (GARI) working group and one convened by the @Asia Investor Group on Climate Change, that our Institute is collaborating with to identify companies whose products and solutions may help society withstand the impacts of a warming world.

Investing in a changing world: How public funds are addressing climate-related physical risks. This paper from Canadian pension plan CPP Investments and think tank OMFIF outlines how five leading public investment funds are working to integrate the risks of a warming world into their investment processes. The paper details challenges in quantifying such risk (one that stood out: most models remain too linear to account for compounding events) and describe strategies to mitigate it.

The best of MSCI

Investment Trends in Focus: Keeping Pace with the First-Half Market Reshuffle. The first half of the year has left global investors to wonder about the United States’ status as the indispensable nation, notes my colleague Ashley Lester, MSCI’s chief research officer, who examines the data from six months in which the U.S. dollar dropped by 10% against its peers and 7% against emerging market currencies as U.S. equities recorded their worst performance against the rest of the world since 1986 and the U.S. entered a rare “triple-red” risk scenario. Time will tell whether the turnabout marks a temporary shift or the start of an enduring realignment. Ashley suggests four signposts to watch amid the uncertainty likely to persist in the months ahead.

Costs or Benefits of Keeping Decarbonization Promises: Evidence from Corporate-Bond Spreads. Companies with a climate target had, on average, lower borrowing costs than their counterparts without such targets over the two years that ended in March. But among companies with climate targets, execution mattered more than ambition. That’s according to my colleague Xinxin Wang, who details how in high-emissions sectors, credible plans can lower borrowing costs, while in low-emissions sectors, even firms on-track with their carbon commitments may still see their borrowing costs rise.

MSCI Private Capital Benchmarks Summary Q1 2025. With private markets making up a growing share of diversified portfolios, investors are seeking deeper insight into how value is created, where risk originates, and how performance stacks up across funds, vintages and strategies. My colleagues Greg Kohles, Keith Crouch, and Uday Karri address these questions using data and cash-flow dynamics from 14,000+ funds representing more than USD 12 trillion. Among the highlights: Buyout funds posted positive quarterly returns, venture capital returned 2.0% despite limited exits and falling public tech stocks, and private credit continued to generate strong relative performance.

Materiality-Weighted Portfolio Carbon Footprint. When it comes to assessing the risk a company confronts in the transition to a low-carbon economy, some emissions matter more than others. My colleagues Guido Giese, Anett Husi, Chris Cote, Gabriela de la Serna, Harinakshi Raina and Jakub Malich explain how corporate emissions become financially relevant when pressures from either policy or technology (such as cheaper or more efficient forms of energy) bear on those emissions, driving companies to adapt.

Anything but work

You Can Swim in the Seine Again. Trust Me. I Just Did. If you’re headed to Paris this summer, consider packing your swimsuit. You can swim in the Seine, reports Catherine Porter for The New York Times after diving in recently near the Île Saint-Louis to find the water “green and silky.” The river that runs through Paris reopened to swimming recently for the first time in a century, thanks to efforts by government to clean up the water ahead of last summer’s Olympics. A colleague from Paris whose friend lives on the Seine affirms the news. “We dive in from time to time, but I always felt weary about the water,” he says. “Now it seems OK.”

What Happens After A.I. Destroys College Writing? Students’ use of artificial intelligence for writing assignments has spurred a return in some university classrooms to exams administered in pen and paper, reports Hua Hsu for The New Yorker, where he examines efforts by educators to reconceive the role of writing in learning while grappling with the ways that AI may be shortchanging students (and compromising their work). “Writing is hard, regardless of whether it’s a five-paragraph essay or a haiku, and it’s natural, especially when you’re a college student, to want to avoid hard work,” notes Hsu, a professor of English at Bard College. His conversations with students suggest the efficiency comes at a cost. “I didn’t retain anything,” a student who had just used AI to compose two papers for a humanities class tells him. The student, Hsu notes, received an A-minus and a B-plus.

Little: A Novel. My book club is currently tucking into this oddball historical romp through 18th-century Paris. (Paris is on my mind!) This story by Edward Carey offers a gothic, imaginative tale that follows a tiny orphan’s hard-luck days apprenticed to a morbid showman, surviving by carving wax from the gutters to Versailles. It’s a darkly delightful blend of fact and fabulism that creates the origin story of Madame Tussauds wax museum empire.