MSCI to Launch Tools to Help Investors Assess Biodiversity and Deforestation Risk

MSCI a leading provider of critical decision support tools and services for the global investment community has announced the forthcoming launch of tools to help investors identify companies at risk of contributing to biodiversity loss and deforestation.

The new screening tools combine thousands of ESG and climate data points, overlayed with MSCI’s proprietary geolocation data that helps pinpoint a company’s operations.

The tools, which MSCI aims to make available to investors in early 2023, include MSCI Biodiversity-Sensitive Areas Screening Metrics, which enable investors to identify companies that have physical assets located in areas of high biodiversity relevance, such as healthy forests, deforestation fronts, or species-rich areas.

MSCI Deforestation Screening Metrics, which indicate companies exposed to deforestation-related risks, including those that may directly or indirectly (via their supply chains) contribute to deforestation. This could be a result of direct operations in areas of risk, such as the tropics, or by the production or reliance on commodities considered key drivers of deforestation, including palm oil, soy, beef, and timber.

Commenting on the new tools Nadia Laine, Executive Director, Head of ESG Products at MSCI, said: “We have spent decades developing data for global investors to measure risk and opportunities related to climate change and ESG factors. We have applied this experience to emerging issues around nature loss and deforestation.”

“Global biodiversity challenges, such as the spread of invasive species, land-use change,

and pollution, will have very tangible impacts on the way in which companies function in the near- and long-term future. MSCI aims to help institutional investors understand those risks on the portfolio level.”

Sylvain Vanston, Executive Director, Climate Investment Research at MSCI ESG Research, added: “The biodiversity on our planet is declining at an alarming rate largely due to human activity, from habitat destruction, pollution, and water stress to climate change-related pressures. This decline in the ability of nature to provide ecosystem services poses a major threat to the global economy.”

MSCI announced the forthcoming launch of these tools during the COP 15 conference in Montreal, which is set to provide a framework with specific goals to protect biodiversity and the world’s natural capital by 2030.

#Biodiversity #ESG #COP15