MSCI ESG Enhanced Focus CTB Indexes

msci.comSUPPORTING INSTITUTIONAL INVESTORS SEEKING TO INTEGRATE ESG AND LOW CARBON
IN THEIR INVESTMENTS

Designed to Maximize
the ESG profile while
minimizing carbon risk

MSCI ESG Enhanced Focus
CTB Indexes

MSCI ESG Enhanced Focus
CTB Indexes – key features

Each index is constructed in part by selecting

Designed to exceed the minimum technicalAs institutional investors evaluate the risk andconstituents of a market capitalization weighted index

requirements laid out for EU Climate Transition

opportunities associated with environmental, social,through an optimization process that aims to maximize

Benchmarks in the EU Delegated Acts.

and governance (ESG) characteristics, the challenge

exposure to ESG factors for a target tracking error

Targets 30% reduction in the weighted averagesome investors face is how to integrate ESG into

budget and exceed the minimum standards of the EU

their investment process and maintain equity market-

Climate Transition Benchmark (CTB).

like exposure. The MSCI ESG Enhanced Focus CTB
Indexes are designed to maximize their exposure topositive ESG factors while maintaining risk and return
characteristics similar to those of their respective
underlying market capitalization weighted indexes.

greenhouse gas (GHG) intensity
Targets 7% reduction in the weighted average

MSCI World ESG Enhanced Focus CTB Index

greenhouse gas (GHG) intensity on an annualized basis

MSCI EM ESG Enhanced Focus CTB Index

Targets 30% reduction in the weighted average potential

MSCI Europe ESG Enhanced Focus CTB Indexemissions intensity

MSCI EMU ESG Enhanced Focus CTB Index

Includes equivalent ratio of weighted average “GreenMSCI USA ESG Enhanced Focus CTB Index
MSCI Japan ESG Enhanced Focus CTB Index
MSCI Pacific ex Japan ESG Enhanced Focus CTB Index
MSCI World Small Cap ESG Enhanced Focus CTB Index

Revenues” to weighted average “Fossil Fuels-based
Revenues” as that of the underlying investment universe.
Aims to maximize the weight of companies with credible
carbon reduction targets through the weighting scheme
Designed to be sector-diversified and target companies
with high ESG ratings in each sector.

Targets a 30% reduction
in carbon compared withparent index

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Excludes companies
involved in controversies

Excludes controversial
weapons and tobacco
producers

MSCI ESG Enhanced Focus CTB IndexesOverview of the Exclusion Screens

Other Exclusion Criteria

ESG

Thermal Coal

TobaccoUN Global Compact

Companies deriving 5% ormore revenue from mining ofthermal coal or 5% or more
revenue from thermal
coal-based power generation

Unconventional Oil and Gas
Companies deriving 5% ormore revenue from oil sands,
oil shale (kerogen-richdeposits), shale gas, shale oil,coal-seam gas, coal-bed
methane as well as Arctic
onshore/offshore reserves

Companies classified as producer or deriving 5% or more aggregate
revenue from production, distribution, retail, and supply of
tobacco-related products

Controversial Weapons
Companies with ties to cluster munitions, landmines, depleted uranium
weapons, chemical and biological weapons, blinding laser weapons,
non-detectable fragments, incendiary weapons

Civilian Firearms
Companies classified as:• Producer of firearms and small arms ammunition for civilian market• Deriving 5% or more revenue from the distribution of firearms andsmall arms

MSCI ESG Global Norms
Screening is designed tohelp investors determine
which publicly traded
companies breach thestandards of conduct
enumerated by the United
Nations Global Compact
Principles, the United
Nations Guiding Principles
on Business and HumanRights, and the ILO
Conventions. All companies determined as failingto comply with the UNGC
principles are excluded.

Missing Controversy Score – Companies notassessed by MSCI ESG Research’s MSCI ESG
Controversy Scores are excluded from the index.
•Missing ESG Rating or ESG Score – Companies
which are not rated by MSCI ESG Research for an
MSCI ESG Rating are excluded from the index.

Nuclear Weapons
All Companies connected with nuclear weapons as:• Manufacturer, provider of components or auxiliary services related tonuclear warheads and missiles, Assembler of delivery platforms fornuclear weapons

Conventional Weapons
Companies deriving 5% or more revenue from the production of
conventional weapons or deriving 10% or more aggregate revenue fromweapons systems, components and support systems and services

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MSCI ESG Enhanced Focus CTB IndexesAbout MSCI Inc.
MSCI is a leading provider of critical decision support tools and services for theglobal investment community. With over 50 years of expertise in research, data andtechnology, we power better investment decisions by enabling clients to understandand analyze key drivers of risk and return and confidently build more effective
portfolios. We create industry-leading research-enhanced solutions that clients use
to gain insight into and improve transparency across the investment process.
To learn more, please visit msci.com/msci-esg-focus-indexes

esgclientservice@msci.com

msci.com@msci		

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