Energy Transition Framework Methodology Document

This methodology document outlines the MSCI Sustainability & Climate Energy Transition Framework, which produces a forward-looking composite score to assess the economic risks a company may face due to the energy transition over the next five to seven years. The document details the calculation of the Energy Transition Score, which evaluates a company's transition readiness against its transition pressure. It explains that the energy transition refers to the shift towards lower greenhouse gas emissions sources of energy and includes a broader transition from high-emitting processes. The scoring methodology is hierarchical, beginning with the Energy Transition Score and detailing components such as transition pressure and readiness. The document also describes the data sources used, the treatment of missing data, and the model's limitations. It emphasizes the importance of consistent methodology application and provides additional disclosures regarding model updates and data quality assurance.