A climate metrics chart from MSCI


Here’s this note from Nawar Alsaadi:

Attached is my absolute favorite climate metrics chart from MSCI. This chart illustrates the systematic and idiosyncratic nature of various climate metrics in combination with their historic or forward looking orientation. Anyone building a climate portfolio, or developing climate metrics, should think of the metrics they choose or develop in these terms.

Do note the metrics shown on this chart are unique to MSCI, but many other metrics from many other providers can be classified as such. Take for example the ERP or Emission Reduction Potential metric used to assess climate solutions by the likes of Project Drawdown and CRANE. A metric like this can be considered impact focused when measured at the solution level (left of the chart below) and company focused (when the ERP is measured through a given company market share in that solution – right side of the chart).