Transition Risk vs. Temperature Alignment: What Really Drives Fund Outcomes?

Carbon footprints tell you where a fund has been. But do they tell you how it’s positioned for the road ahead?

In this episode, we unpack new research from Positioning Portfolios for the Energy Transition (link to paper), analyzing more than 37,000 funds representing $50 trillion in assets. The findings suggest that funds with stronger energy transition positioning scores delivered higher historical returns and were more closely linked to real-world decarbonization.

We explore the critical distinction between transition pressure (risk exposure) and transition readiness (strategic preparedness), why temperature alignment and transition risk are not the same thing, and what this means for investors balancing financial performance with climate objectives.

If you think climate metrics begin and end with carbon intensity, this conversation will challenge that assumption!

Host: Mike Disabato, MSCI Sustainability & Climate

Guest: Kishan Gangadia, MSCI Sustainability & Climate