MSCI Launches Two China Climate Change Indexes
What’s new: Global index complier MSCI published two China climate change indexes Tuesday to give guidance to investors incorporating climate change risk and opportunities into their investment process.
The newly created indexes reweight each listed company in the MSCI China Index and the MSCI China A Index based on a score measuring their transitions towards a lower carbon economy.
For example, internet giant Tencent Holdings counts for 15.29% in the MSCI China Index, while it enjoys an additional weighting of 1.67% in the MSCI China Climate Change Index. Food delivery provider Meituan Dianping and e-commerce giant JD.com both have a lower weightings in the climate index compared with the parent index.
The background: Global investors in index-linked strategies are increasingly looking for portfolios of companies reducing their carbon footprint and avoiding companies with higher exposure to climate change risks.
After the European Commission unveiled two climate change benchmarks last year, major index providers including MSCI, FTSE and S&P Dow Jones Indices all launched a string of climate change indexes linked to the two benchmarks. Asset managers have also started to offer exchange-traded funds that track climate change indexes.
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