Announcement for July 31, 2023 at 04:09 PM GMT

THIS IS AN ANNOUNCEMENT FOR THE MSCI GLOBAL STANDARD INDEXES

UPDATE ON THE IMPLEMENTATION OF THE ENHANCEMENTS TO THE MSCI CLIMATE PARIS ALIGNED INDEXES METHODOLOGY

MSCI announced today that certain of the enhancements previously announced to be implemented for the MSCI Climate Paris Aligned Indexes methodology in the November 2023 Index Review have been postponed. The enhancements that are scheduled for implementation at the November 2023 Index Review reflect the consultation feedback with reference to the need to update the minimum exclusionary standards for a Paris-Aligned indexed strategy, as well as to consistently adapt to the deprecation by the MSCI ESG Research of certain temperature-scenario based Climate VaR measures (and thus seek to avoid excess or reverse turnover).

Specifically, MSCI will implement the following changes in the MSCI Climate Paris Aligned Indexes methodology effective from the November 2023 Index Review:
- New exclusion criteria to exclude companies involved in Nuclear Weapons and Civilian Firearms;
- Replacement of the company-level 'Aggregated Extreme Weather Equity Climate VaR' under the "aggressive scenario" (as described in Appendix III of the current index methodology) by the MSCI Physical Risk Climate VaR metric, based on the "aggressive outcome" of the '4-degree Celsius IPCC SSP 3 7.0 Physical Climate VaR Scenario' (IPCC SSP 3 7.0, https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_SPM_final.pdf for more details);
- Additionally, following the announced deprecation of the "AIM CGE"-based policy and technology opportunities Climate VaR metrics, MSCI will also implement instead the use of the MSCI 1.5-degree Celsius REMIND Orderly-based equivalents at the same time.
- Replacement of '1.5C Aggregated Policy Risk Equity Climate VaR (AIM CGE) [%]' (as described in Appendix III of the index methodology) by the MSCI '1.5C Aggregated Policy Risk Company Climate VaR (REMIND NGFS ORDERLY) [%]' metric
- Replacement of '1.5C Technology Opportunity Equity Climate VaR (AIM CGE) [%]' (as described in Appendix III of the index methodology) by the MSCI '1.5C Technology Opportunity Company Climate VaR (REMIND NGFS ORDERLY) [%]' metric

Following a revision of the timeline for the enhanced MSCI Implied Temperature Rise (ITR) methodology announced to clients on July 27, 2023, MSCI will not implement the following changes in the MSCI Climate Paris Aligned Indexes methodology until the May 2024 Index Review:
- An additional index-level ITR objective to ensure that the index's ITR is less than or equal to 2 degrees;
- An emission budget objective to ensure that the cumulative projected emissions of the index constituents at an aggregate level is lower than their share of the estimated remaining carbon budget, consistent with restricting global warming at or below 1.5 degrees (as per the MSCI ITR).

MSCI will send separate communications to relevant clients in due course regarding the potential implementation of these changes in custom indexes.

This announcement aims to provide transparency and offer sufficient lead time prior to implementation of the changes, in line with market participants' feedback. MSCI will make available the updated MSCI Climate Paris Aligned Indexes methodology document prior to the implementation of the aforementioned enhancements.

THIS IS AN ANNOUNCEMENT FOR THE MSCI GLOBAL STANDARD INDEXES

                                     End of announcement.
                                     Further announcements may occur as needed.