Investment data and research provider MSCI announced the launch of the Glidepath Corporate Bond Indexes, a new suite of nine indices aimed at facilitating the transition of portfolios over time to align with ESG and climate-related investment objectives.

According to MSCI, the new indices utilize a combination of target factors, such as ESG scores, greenhouse gas (GHG) emissions, or a combination of the factors, to gradually transition each index from a replica of the parent index towards an index with specific characteristics.

Through the new process utilized by the indices, the cash generated by the fixed income investments in each index will be allocated to issuers that are more aligned with the index’ target factors, rather than the typical reallocation into the entire pro-rata index.

According to a report released alongside the launch of the new indices, MSCI noted the challenged facing fixed income investors in balancing their fiduciary duties with their sustainability commitments, with the company highlighting their glidepath-index methodology as a solution to help investors transition bond portfolios towards sustainability goals by reinvesting cash flows into issuers aligned with specific ESG and climate-related objectives.

In a social media post announcing the new indices, MSCI said:

“The MSCI Glidepath Corporate Bond Indexes could offer a new perspective on the way institutional investors could approach the transition of their fixed income portfolios. Glidepath, with its distinctive features and transparent methodology, can become a valuable tool for fixed income investors.”