Index provider MSCI has created a tool designed to measure the potential impact of climate change on company valuations.
The MSCI Climate Value-At-Risk, or Climate VaR, from MSCI ESG Research is designed to help investors assess their exposure to climate-related risks and opportunities. The company said the tool provides financial institutions with â€œthe means to identify assets that may be at risk from the worst effects resulting from climate change, while helping to identify innovative low-carbon investment opportunities, through security-specific modelling.â€
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The product covers more than 10,000 companies, assessing all their associated equities and
corporate bonds within the analysis, the company said in a release.
â€œAnalysis reveals that nearly 7% of global facilities owned by MSCI ACWI Index constituents are threatened by coastal flooding risk and nearly 62% of index constituents had at least one facility in a flood-prone area, underlining the importance for investors in considering these risks and integrating this information into their investment decision-making,â€ MSCI said.