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MSCI To Include ESG Risks Into Investment Products

MSCI, a US-based provider of investment decision support tools to investors globally, including asset managers, banks, hedge funds and pension funds, is planning to include environmental, social and governance (ESG) risks into its investment products, reported the Financial Times.

The new strategy comes after MSCI’s $1.55bn acquisition of RiskMetrics. The addition of ESG risk is expected to affect how investors perceive non-financial risks.

RiskMetrics, which provides portfolio analysis services to investors, acquired investing firms Innovest and KLD in 1999. MSCI will merge those entities into one group, which will then work to integrate those criteria into MSCI’s primary indices, according to the Financial Times.

Henry Fernandez, CEO of MSCI, said: “The addition of RiskMetrics greatly expands our capabilities in the high growth, high margin business of multi-asset class risk management analytics. Recent events continue to demonstrate the importance of managing risk in today’s financial markets and our clients will benefit from our company’s expanded product range and enhanced risk

management offerings.”