MSCI report identifies new risk landscape for investors

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MSCI report identifies new risk landscape for investors
Although ESG is not a new concept, it is rapidly becoming the new normal in the investment world and is topping the agendas of many corporations. Environmental, social and governance considerations have become increasingly important as they are being evaluated by investors and the public as a crucial part of company analysis alongside conventional financial metrics.

While many ESG factors, such as climate change, biodiversity, and regulation have become well-established, long-term trends, 2022 has been a year of turmoil, with a war in Europe, rising geopolitical tensions, an energy crisis, soaring inflation, a sharp turn in central banks’ policies, climate-induced disasters and more. Many of these events will have long-lasting impacts on the world and the global economy, giving rise to new ESG risks, as well as opportunities.

Climate change remains a key concern
The most important large-scale trend shaping the ESG-investing world is undoubtedly climate change, including decarbonization of sectors and economies, as well as investors’ and companies’ attempts to chart a course to net-zero. 

“It is not surprising that many on our research team touch on climate change across a variety of angles: from carbon credit funds to insured emissions, and from scrutiny of net-zero targets to decarbonising industrial real estate,” says Meggin Thwing Eastman, Managing Director and Global ESG Editorial Director at MSCI.