The MSCI Weighted Carbon Intensity Score

The MSCI Weighted Average Carbon Intensity Score describes the carbon output per $million of revenue, for each company in the portfolio. The lower the score, the lower the Fund’s exposure to carbon. 

We can compare the  MSCI Weighted Average Carbon Intensity Score of the portfolio and compare it with a traditional market exposure, such as the MSCI World ETF, which tracks a global shares index. We refer to this as the 'benchmark.' 

Is a high score 'bad'?

When the portfolio MSCI Weighted Average Carbon Intensity Score is higher than a market index or benchmark, we identify the reasons and decide whether it's acceptable. For example, companies that are still in the process of transitioning to cleaner energy may have higher scores today, but these should fall over time. 

In the case of the Future Focused Fund,  the higher score is mainly due to the portfolio's US Green Bond exposure, where there has been an increased investment in US power companies transitioning to renewables. We are comfortable with the reason for the higher score, as these companies are working towards a lower carbon future. 

The Future Focused Fund allocates capital to assets that are working towards a lower carbon future, which means that the Fund has exposure to companies that are still in the process of transitioning