MSCI ESG indices outperform parent index despite oil & gas rebound

Semi-conductors outperformed

Despite oil and gas’s rebound in 2021, MSCI environmental, social and governance indices – which are said to often have lower weights to high carbon industries – managed to outperform the parent MSCI ACWI index for the second year in a row.

A key factor to this outperformance depended on the index weightings. According to MSCI, its leading ACWI ESG indices had higher exposure to the outperforming semi-conductor industry than the parent index. The ESG indices also had lower weights in airlines, aerospace and defence, which all underperformed, offsetting the strong performance by oil and gas companies following the rebound. MSCI: Global companies failing on climate goals Yuliya Plyakha Ferenc, vice-president of MSCI Research, wrote: "These exposures compensated for almost all the losses from the indexes' lower exposures...