MSCI Sets the Bar for Assessing Carbon Project Integrity With Launch of New Ratings
- MSCI Carbon Project Ratings independently assess the integrity and risks of carbon credit projects across multiple criteria.
- First ratings to assess over 4,000 projects in the carbon credit market and consider legal and ethical risks.
- Launch marks next step towards realizing MSCI’s commitment to advance clarity and set standards in carbon credit markets.
MSCI Inc. (NYSE: MSCI), a leading provider of critical decision support tools and services for the global investment community, launched MSCI Carbon Project Ratings to enable buyers, investors, and developers of carbon credits to better assess the quality and integrity of carbon projects.
“Carbon markets are critical to accelerating decarbonization and meeting net-zero goals, but only 5% of projects on the market are considered to be of very high integrity,” said Guy Turner, Head of MSCI Carbon Markets. “Lack of confidence in the quality and integrity of projects is causing some buyers, investors and developers to hesitate.”
To help clients navigate this challenge, MSCI Carbon Project Ratings assess over 4,000 projectsin the global carbon credit market1 to offer more comprehensive, investment-grade, independent assessments of integrity and risks. Criteria considered in MSCI’s assessment include a project’s impact on the climate, environment and society, as well as legal and ethical risks, including financial crime, fraud, and sanctions.
“MSCI Carbon Project Ratings give clients the confidence to stake their strategies, capital and reputations on carbon credits while allowing them to compare credits across the entire market, mitigate risks from investment decisions, and fulfill disclosure requirements,” added Turner.
Through a transparent and rules-based methodology that leverages MSCI’s independence and expertise in setting industry standards for climate investing, each individual project is assessed in depth against six criteria and over 50 sub-criteria broadly categorized under emissions impact and implementation integrity. The rating is a composite of these two categories and based on a seven-point letter rating scale from AAA to CCC. Projects rated AAA have both a high likelihood of achieving a 1 tonne emissions impact per credit and being implemented in a way that supports positive social and/or environmental outcomes, while upholding legal and ethical standards.
MSCI Carbon Project Ratings integrate with the full suite of MSCI Carbon Markets solutions to provide integrity-based insights across the market, from integrity-based price indexes to assessments of corporate climate performance.
About MSCI Inc.
MSCI is a leading provider of critical decision support tools and services for the global investment community. With over 50 years of expertise in research, data, and technology, we power better investment decisions by enabling clients to understand and analyze key drivers of risk and return and confidently build more effective portfolios. We create industry-leading research-enhanced solutions that clients use to gain insight into and improve transparency across the investment process. To learn more, please visit www.msci.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or performance and involve risks that may cause actual results or performance differ materially and you should not place undue reliance on them. Risks that could affect results or performance are in MSCI’s Annual Report on Form 10-K for the most recent fiscal year ended on December 31 that is filed with the SEC. MSCI does not undertake to update any forward-looking statements. No information herein constitutes investment advice or should be relied on as such. MSCI grants no right or license to use its products or services without an appropriate license. MSCI MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE WITH RESPECT TO THE INFORMATION HEREIN AND DISCLAIMS ALL LIABILITY TO THE MAXIMUM EXTENT PERMITTED BY LAW.
1 As of 15 September 2024
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