MSCI & WWF

In November 2024, WWF announced a partnership with MSCI, one of the world's largest financial data providers, to integrate nature-related data from the WWF Biodiversity Risk Filter (BRF) into the MSCI product suite. This collaboration between WWF Switzerland, WWF Germany, and MSCI represents a significant step toward embedding nature considerations into investment decisions and stewardship activities worldwide. By combining WWF's extensive biodiversity expertise with MSCI's reach across financial institutions, this partnership creates a new leverage which might influence global capital flows that can contribute to nature-positive outcomes.

Redesigning the Watershed of Finance to Nurture a Nature-Positive Economy 

Financial flows function much like watersheds in nature. Just as water shapes landscapes and sustains ecosystems, capital flows shape economic landscapes and determine which activities thrive or decline. When money flows to certain sectors, those industries flourish; when funding dries up, those activities wither. By influencing these financial "watersheds," we can nurture economic activities that protect biodiversity while constraining those that damage nature.

Financial markets therefore represent one of the most potent leverage points to steer our economy towards a nature-positivity outcome. While finance has historically funded or ignored environmental degradation, its immense influence over economic activities means we cannot afford to remain disengaged. Instead, WWF has strategically chosen to work with the financial sector, reshaping how capital flows through the global economy.

Information as the Driver of Change

Financial markets operate fundamentally on information. Each day, countless investment decisions worth billions of dollars are made based on available data. Investors constantly seek reliable insights to guide their capital allocation decisions or to define what issues to engage with companies, making information the key driver of market behavior.

By providing critical nature-related information directly to decision-makers within financial institutions and central banks, we create a new market force that can shape decisions. The partnership with MSCI allows us to integrate biodiversity expertise precisely where investment decisions happen – into one of the most trusted data platforms that financial institutions consult daily. This approach follows a simple but powerful principle: what gets measured gets managed.

Sustainability Data & Analytics Providers: Strategic Amplifiers 

Sustainability Data & Analytics providers such as MSCI indeed play a crucial role as a primary source of information for global finance - comparable to how TripAdvisor or Google Reviews function for travelers. Thousands of financial institutions depend on their data and analysis to guide investment decisions. Through this partnership with MSCI, WWF can amplify its impact reaching far more financial institutions than would be possible through direct engagement alone.

The Biodiversity Risk Filter at the Core of the partnership 

At the core of the partnership, WWF and MSCI work together to bring the insight from the WWF  Biodiversity Risk Filter to financial institutions. To this end, the partnership combines two powerful data resources:

This integration enables location-specific assessments of nature-related risks, impacts and dependencies. Context is critical in biodiversity assessment - building infrastructure in an industrial zone differs significantly from building in a nature reserve, and growing water-intensive crops in drought-prone regions creates substantial operational risks.

To provide an example, consider the case of semiconductor manufacturing. This industrial process is highly dependent on water. While a sectoral analysis would end here, the new products allow financial institutions to understand at which manufacturing site this risk is highly relevant in case the location is affected by water scarcity. This is illustrated on the map below, that depicts the water scarcity risks for semiconductor and electro manufacturing sites in the US. It clearly shows the variation of risk across the country, where you can also identify industrial hubs representing high cluster risks regions. The joint WWF-MSCI products will make these granular assessments readily accessible to financial institutions.

Financial institutions can use these data points for several use cases. 

• Portfolio assessment: Prioritize high-risk clusters in your portfolio such as i) high-risk companies, ii) high-risk landscapes that many companies are exposed to and understand competition around scarce resources in these areas, and iii) identify specific issues that drive risk (e.g. water scarcity, pollination services) for the majority of investments.
• This prioritization can inform your development of ESG risk policies and guidelines and engagement priorities. 
• Inform stewardship activities (e.g. engagement and voting).
• Provide data points for voluntary or regulatory reporting.

Implementation Structure

The partnership is organized around three distinct workstreams:

Workstream 1: Data Integration and Product Development focuses on collaborative development of integrated products by our technical teams. They are mapping datasets, aligning data architectures, and identifying high impact use cases. The product roadmap envisions a first release in April 2025 focused on asset-level risk assessments (14 indicators), before additional assessments on transition risks and company-level insights are planned to be released over the coming year.

Workstream 2: Market Engagement and Communication centers on joint communication initiatives to inform financial institutions about nature-related risks and demonstrate how our integrated products can help manage these considerations. A key 2025 planned deliverable will be a case study applying our methodology to companies identified by Nature Action 100.

Workstream 3: Innovation Incubation serves as a collaborative workshop space to explore new features and opportunities beyond the initial scope, including supply chain analysis, integration with central banking initiatives, and expanded coverage of critical biomes such as oceans, forests, and freshwater systems.

Guardians of Nature Information

In an age where climate initiatives and databases are being under pressure, we all have a duty to foster the development of and ensure access to crucial information about the state of our planet. We must ensure financial decision-makers and capital allocators have the information they need to build a prosperous future and maintain a living planet for future generations. This is precisely why WWF, along with our many partners, aims to mainstream robust consideration of nature in financial markets, one of the most influential systems shaping our planet.