Glossary

Adaptation of public and private financial flows to the goals of the Paris Agreement on climate change. The Paris Agreement defines this adaptation as the alignment of financial flows with a pathway towards low greenhouse gas emissions and climate-resilient development.

Climate engagement is a shareholder activity that seeks to persuade management to take climate issues into account. This is a dialogue that includes both communication with the management and/or boards of directors of companies as well as submission of or support for shareholder proposals. Successful engagement can lead to changes in a company’s strategy and processes to reduce risks.

Climate engagement initiative Initiatives launched with the aim of achieving net zero growth by 2050. An example is Climate Action 100+.

MSCI uses a global 2 °C carbon budget based on the remaining global carbon budget available to limit warming to 2 °C, derived from the IPCC. This is used to assess whether portfolios are geared towards 2 °C, which refers to the Paris Agreement target of limiting warming to below 2 °C.

Gases such as carbon dioxide (CO2), nitrous oxide (N2O), methane (CH4) and ozone (O3) in the atmosphere that contribute to the greenhouse effect are known as greenhouse gases (GHGs). These gases prevent solar radiation from escaping and retain heat near the Earth’s surface, where it warms the Earth's atmosphere.

In a long-only strategy, investments are only made in long positions. For the purposes of the Swiss Climate Score, only long positions should be taken into account from 2022.

Footprint refers to the total greenhouse gas (GHG) emissions of a portfolio. It is measured in tonnes of CO2 equivalents per million CHF invested (tCO2e/CHF million.

Carbon emissions (CO2) per million francs in revenue, expressed in tonnes of CO2/CHF million revenue. For a portfolio, all intensities of the underlying investments and their weights are calculated and scaled up by the coverage. 1. The volumes are from the corporate bonds and equities asset classes 2. Volume of investments or assets held in the expectation that their value will increase in the future 3. Greenhouse gas data for Scopes 1, 2 and 3 are available either in reported or estimated form.

The term “science-based” is currently used for the most part in connection with climate targets. Such targets provide companies with a clearly defined pathway to reducing their greenhouse gas emissions. According to the Science Based Targets initiative, targets are considered “science-based” if they are consistent with the latest findings of climate science necessary to achieve the goals of the Paris Agreement, i.e. limiting global warming to well below 2 °C above pre-industrial levels and pursuing efforts to limit warming to 1.5 °C. The concept can also be applied to other sustainability goals.

These are emissions that originate directly from a company’s activities, such as the combustion of fuels in its own facilities.

These are emissions that arise when a company purchases and uses energy such as electricity or heat.

These are emissions that arise along a company’s supply chain, both upstream and downstream. This includes the production of goods and services purchased by the company, business travel by its employees and the use and disposal of the products it sells by its customers.

The amount of CO2e emissions per million francs of revenue (carbon efficiency of a portfolio), expressed in tonnes of CO2e/CHF million revenue. A common measure used here is the weighted average carbon intensity (WACI). The WACI measures the portfolio’s exposure to CO2e intensive companies, expressed in tonnes of CO2e/CHF million.

The benchmark is a mixed index, which tracks the same asset classes as the portfolio itself – with traditional, non-explicitly sustainable indices. Further information on the reference index can be found at the end of the document.