MSCI and Burgiss Launch Carbon Footprinting of Private Equity and Debt Funds to Assess Impact of Climate Change on Private Asset Portfolios
October 19, 2021 at 08:00 am EDT
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MSCI Inc. and The Burgiss Group, LLC have announced the launch of a new analytical tool that enables institutional asset owners and managers to better understand the impact of climate change on private asset portfolios. Launched ahead of COP26, the Carbon Footprinting of Private Equity and Debt Funds measures the carbon intensity of private equity and debt funds. The analytical tool is designed to address a serious transparency gap in the private assets market, spanning private equity, fixed income, and venture capital investments. Though the transition to net-zero affects every asset, the challenge of addressing climate risk intensifies with private portfolios, both because of the importance of private assets in institutional portfolios and the opacity that can characterize them. With emissions estimates for over 15,000 private companies and nearly 4,000 active private equity and debt funds, the tool will support institutional investors, including those who have made public net-zero commitments, to assess climate-related risks holistically across asset types and align their private asset portfolios with global temperature targets. Carbon Footprinting of Private Equity and Debt Funds combines private company data from Burgiss, which institutional investors across the world turn to for insight into private asset funds, with modelling developed by MSCI ESG Research for estimating corporate carbon emissions. The analytical tool helps investors: Measure and monitor greenhouse gas (GHG) emissions of private equity portfolios, based on estimates for over 15,000 companies in more than 4,000 active private equity and debt funds.
Aggregate and compare GHG emissions by fund, asset class, strategy, or portfolio. Align private asset portfolios with global temperature targets. Identify carbon-intensive investments and low-carbon investment opportunities. Measure the carbon footprint of private equity funds to inform engagement. Measure progress towards net-zero commitments and report on decarbonization of private equity and debt portfolios pursuant to the Task Force on Climate-related Financial Disclosures (TCFD).
MSCI, Inc. specializes in publishing information and support tools dedicated to institutional investors. Net sales break down by activity as follows:
- dissemination of stock market indices (57.4%): used in particular for the creation of indexed products, comparative performance analysis, rebalancing and asset allocation;
- development of market analysis solutions and tools (24.4%): development of content, applications and services for risk management, performance attribution and portfolio management;
- development of tools for the analysis of environmental, social and governance criteria (11.4%);
- other (6.8%).
Net sales are distributed geographically as follows: the United States (41.3%), Americas (4.4%), the United Kingdom (16.1%), Europe/Middle East/Africa (22.5%), Japan (4%) and other (11.7%).