Research and data firm MSCI has announced plans to launch new tools to help investors identify companies at risk of contributing to biodiversity loss and deforestation. The new screening tools combine thousands of ESG and climate data points, overlayed with MSCI’s proprietary geolocation data that helps pinpoint a company’s operations.

The tools, which MSCI aims to make available in early 2023, include biodiversity-sensitive areas screening metrics, which enable investors to identify companies that have physical assets located in areas of high biodiversity relevance, such as healthy forests, deforestation fronts, or species-rich areas.

There are also deforestation screening metrics, which indicate companies exposed to deforestationrelated risks, including those that may directly – or indirectly via their supply chains – contribute to deforestation. This could be a result of direct operations in areas of risk, such as the tropics, or by the production or reliance on commodities considered key drivers of deforestation, including palm oil, soy, beef, and timber.

Nadia Laine, executive director and head of ESG products at MSCI, said: “We have spent decades developing data for global investors to measure risk and opportunities related to climate change and ESG factors. We have applied this experience to emerging issues around nature loss and deforestation.

“Global biodiversity challenges, such as the spread of invasive species, land-use change, and pollution, will have very tangible impacts on the way in which companies function in the near- and long-term future. MSCI aims to help institutional investors understand those risks on the portfolio level.”

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