Review the MSCI methodology behind the Sustainability Characteristics and Business Involvement metrics: 1ESG Fund Ratings; 2Index Carbon Footprint Metrics; 3Business Involvement Screening Research; 4ESG Screened Index Methodology; 5ESG Controversies; 6MSCI Implied Temperature Rise
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If the Fund invests in any underlying fund, certain portfolio information, including sustainability characteristics and business-involvement metrics, provided for the Fund may include information (on a look-through basis) of such underlying fund, to the extent available.
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Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
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Distribution Yield and 12m Trailing Yield results may have period over period volatility due to factors including tax considerations such as treatment of passive foreign investment companies (PFICs), treatment of defaulted bonds or excise tax requirements; exceptional corporate actions; seasonality of dividends from underlying holdings; significant fluctuations in fund shares outstanding; or fund capital gain distributions.
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As an expert in sustainable investing and financial methodologies, I bring a wealth of knowledge and experience to elucidate the intricacies of the MSCI methodology behind the Sustainability Characteristics and Business Involvement metrics, as outlined in the provided text.
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ESG Fund Ratings: MSCI's ESG Fund Ratings likely involve a comprehensive assessment of a fund's Environmental, Social, and Governance (ESG) factors. This assessment likely considers various criteria, including a company's carbon footprint, ethical business practices, and governance structures.
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Index Carbon Footprint Metrics: The Index Carbon Footprint Metrics refer to MSCI's evaluation of the environmental impact of the companies included in an index. This involves measuring and quantifying the carbon emissions associated with the index constituents, providing investors with insights into the index's environmental sustainability.
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Business Involvement Screening Research: MSCI's Business Involvement Screening Research is likely a process through which the index provider assesses and screens companies based on their involvement in certain industries or activities. This may include evaluating a company's impact on controversial sectors or assessing its alignment with specific sustainability goals.
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ESG Screened Index Methodology: The ESG Screened Index Methodology is the approach MSCI employs to construct indexes that adhere to specific ESG criteria. This likely involves applying screens to exclude companies that do not meet predefined sustainability standards, ensuring that the index aligns with the fund's ESG objectives.
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ESG Controversies: The mention of ESG Controversies suggests that MSCI takes into account any ethical or controversial issues associated with the companies in its assessments. This could involve tracking and reporting on controversies related to environmental, social, or governance practices.
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MSCI Implied Temperature Rise: MSCI Implied Temperature Rise is likely a metric used to estimate the potential contribution of a portfolio or index to global temperature increases. This forward-looking measure provides investors with insights into the climate impact of their investments.
The text also emphasizes the importance of referring to a fund's prospectus for detailed information. Furthermore, it mentions the screening applied by the index provider, which may include revenue thresholds set by the index provider.
Additionally, the disclaimer highlights the information's source—MSCI ESG Research LLC—and underscores the need for caution in using the information for investment decisions. It outlines the risks associated with investing, including those related to ESG factors, fixed income, international investing, and the potential for deviations in performance based on market conditions.
In conclusion, the provided information offers a glimpse into MSCI's robust methodology for evaluating sustainability characteristics and business involvement in funds and indexes, providing investors with a comprehensive framework for making informed decisions aligned with ESG principles.
