MSCI launches single ESG platform, which will host forthcoming ratings system

MSCI, the global index firm, has made its first major ESG product launch since the $1.55bn acquisition of RiskMetrics Group in 2010, with the introduction of MSCI ESG Manager, a single software platform for its ESG research, analysis and compliance data.
The platform will also host a new ESG corporate ratings system to be launched later this year. MSCI said the new product was a major step in its integration of the legacy KLD, Innovest and IRRC businesses, which were acquired in the RiskMetrics deal. It will combine MSCI ESG’s existing Impact Monitor service and its ‘Business Involvement’ portfolio screening research. Impact Monitor looks at significant social and environmental impacts in companies on the MSCI World index and includes alerts on major ESG controversies and violations of global norms and conventions such as the UN Global Compact and ILO Core Conventions. MSCI said it would expand the product to include all companies in the MSCI Emerging Markets Index in September, with small-cap coverage in regions including the UK, Australia, Canada and Scandinavia added subsequently.The Business Involvement screen looks at all global publicly-traded companies involved in activities such as the production of alcohol, tobacco or controversial weapons, or those that violate religious screening mandates such as Catholic or Islamic Values. Remy Briand, Managing Director and Global Head of Index and ESG Research at MSCI, said: “We have been building out the new MSCI ESG Research and Index businesses: expanding our sales, client service, product development, and research teams around the globe. Our aim is to set standards for the ESG market place by providing products and services to help clients integrate ESG factors into their investment processes, and the new MSCI ESG Manager provides an easy and convenient way to do this.” The firm has also been consulting this year with investors on the possibility of developing global socially responsible indices. That would build on the 23 environmental, social and governance (ESG) indices that are the continuation of the KLD indices that MSCI acquired as part of the RiskMetrics buy-out. Announcements on the outcome of the consultation have yet to be made.