MSCI: Energy sector biggest risk to aligning portfolios with climate goals

Among 'most emission-intense' sectors

Companies in the energy sector have unsurprisingly been found to be leading contributors to ‘warming’ investment portfolios and hindering climate goals, according to research by index provider MSCI.

The firm is aiming to shed light on how sector and stock allocation can impact the temperature of portfolios - and therefore their contribution to global warming - using an attribution tool such as the Brinson model. The Brinson model can be used to describe the difference between portfolio return and benchmark return. In this case, the concept is being used to evaluate drivers behind an investment portfolio's overall temperature. "Energy, materials and utilities had the highest associated temperatures, which is intuitive, as they were also among the most emission-intensive sectors...