To address climate change, many of the world’s major countries have signed the Paris Agreement. The temperature goal of the Paris Agreement is to limit global warming to well below 2°C above pre-industrial levels, and ideally 1.5 °C, which will help us avoid the most severe impacts of climate change.

The ITR metric is used to provide an indication of alignment to the temperature goal of the Paris Agreement for a company or a portfolioKolkata Investment. ITR employs open source 1.55° C decarbonization pathways derived from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS)Jaipur Wealth Management. These pathways can be regional and sector specific and set a net zero target of 2050, in line with GFANZ (Glasgow Financial Alliance for Net Zero) industry standards. We make use of this feature for all GHG scopes. This enhanced ITR model was implemented by MSCI on February 19, 2024.

The ITR metric is calculated by looking at the current emissions intensity of companies within the fund’s portfolio as well as the potential for those companies to reduce its emissions over time. If emissions in the global economy followed the same trend as the emissions of companies within the fund’s portfolio, global temperatures would ultimately rise within this band.Agra Wealth Management

Note, only corporate issuers are covered within the calculation. A summary explanation of MSCI’s methodology and assumptions for its ITR metric can be foundKolkata Stocks

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