MSCI, a provider of equity portfolio analysis tools based in New York City, is expanding its ESG research coverage to 21,000 mutual funds and ETFs, MSCI announced Tuesday.
The new tool, Fund Metrics, will measure the environmental, social and governance (ESG) characteristics of portfolio holdings and rank or screen funds based on such factors as sustainable impact, values alignment and ESG risks, including carbon footprint.
“The development of Fund Metrics was based on client consultation, which included some of the world’s largest wealth managers who are looking for greater insight into the ESG attributes of their portfolios, reflecting growing attention to ESG among investors,” says Eric Moen, managing director of MSCI ESG Research. “The demand from clients who want to consider ESG criteria to align their investments with their values is continuously increasing. Fund Metrics is a natural extension of our ESG ratings and research, adding even more transparency as the sustainable investing movement gains momentum.”
Each fund will receive an overall score, the Fund ESG Quality Score, a peer group percentile rank and individual environmental, social and governance scores. The ESG Quality Score reflects the ability of the underlying holdings to manage medium- to long-term risks and opportunities, says MSCI.