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Morgan Stanley and The Economist Intelligence Unit release new climate change index

Monday, September 18, 2017
Opalesque Industry Update - The Morgan Stanley Institute for Sustainable Investing released the Climate Change Mitigation Opportunities Index, a report and interactive tool investors can use to examine the risks and opportunities of climate change mitigation investments. The index seeks to evaluate technology investment opportunities, both on their impact on mitigating climate change and their potential for market-rate returns.

With input from a panel of experts, the Institute, with The Economist Intelligence Unit, identified five sectors (energy, transportation, industry, agriculture and the built environment), which are responsible for 90 percent of all greenhouse gas emissions. The index is then applied across 20 countries selected to illustrate climate change mitigation opportunities across a range of geographies and economies. The index considers country-level conditions such as sector maturity, infrastructure, political environment and other enabling factors in order to inform investors about specific opportunities and risks. The threats posed by climate change require that we adapt to a new reality of severe weather, rising resource costs and increased risk. But underpinning a successful adaptation strategy is the need for mitigation ? reducing emissions to avoid the worst impacts of climate change. Across all sectors, innovation is driving efficiency and productivity.

"As we experience the short- and long-term impacts of climate change, there are many opportunities available to investors who are interested in using their capital to create a more sustainable future," said Hilary Irby, Co-Head of the Global Sustainable Finance group at Morgan Stanley. "This index strives to provide a deeper understanding of the range of technologies and types of investments that can help mitigate climate change, and where those investments are likely to have the greatest environmental impact and financial reward."

Key findings from the Climate Change Mitigation Opportunities Index report:

- The international climate policy outlook is uncertain, especially with the United States' announcement that it will withdraw from the Paris Agreement, but corporations and other public leaders are tightening their focus on climate change mitigation, adding market impetus for investment.

- The clean energy outlook remains strong in emerging markets with their growing energy demand, rising emissions and pollution concerns, and falling clean tech prices.

- Rapid urbanization, environmental concerns and demand for cost efficiency are creating substantial opportunities in the green buildings sector.

- Agriculture technologies for climate mitigation are coming to the forefront after years of neglect. In advanced economies ? that are both able to afford mitigation technologies and have sophisticated investment markets ? growth opportunities lie in the substitution of clean for dirty infrastructure. These countries dominate the top of the overall index rankings.

- Mitigation across sectors is interconnected and investments in one sector can reduce emissions in others.

"This new index shows that there is tremendous potential for investors to focus on technology to mitigate climate change," said Samantha Grenville, Senior Consultant at The Economist Intelligence Unit. "By providing data-driven analysis in five sectors ? energy, transportation, industry, agriculture and the built environment ? we hope the index can inform investors about specific opportunities and risks."

The Climate Change Mitigation Opportunities Index is the second in a two-part study that seeks to equip investors with data-driven tools to identify sustainable investment opportunities in support of two outcomes ? mitigating climate change and driving inclusive growth. Published in May 2017, the Inclusive Growth Opportunities Index uncovers insights about the opportunity for technology investments to promote inclusion across financial services, education, healthcare and gender themes.

Press release.

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To explore the Climate Change Mitigation Opportunities Index 2017 in detail, click here:

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