MSCI Inc. 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: MSCBiododiversity-Sensitive Areas Screening Metrics, which enable investors tidentify companies that have p 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. MSCI aims to help institutional investors understand those risks on the portfolio level."MSCI announced the forthcoming launch of these tools during the 15(th) Conference of the Parties (COP 15) in Montreal, which is set to provide a framework with specific goals to protect biodiversity and the world's natural capital by 2030.

Emerging financial regulations -- such as the European Union Biodiversity Strategy 2023, or recent EU legislation banning imported good connected to deforestation - are also bringing companies under more scrutiny for contributing to nature loss, presenting new financial risks for their investors. MSCI ESG Research's ESG and Climate Trends to Watch for 2023 report indicates that companies' level of preparedness for these types of regulation is low, as less than 12% of food product companies had disclosed a deforestation policy as of October 2022.