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How MSCI Uses Aqueduct

MSCI ESG Research evaluates a company’s water management strategy through a risk based lens as an input to our MSCI ESG Ratings model for companies and industries. As of August 2019, water stress is evaluated as a key issue for approximately 20% of companies in the MSCI ACWI Index . The risk assessment is based on two key components: the water dependency of a company’s lines of business and the location of a company’s operations in water-stressed geographies. As water stress is a local issue, our assessment requires a systematic means of combining corporate asset-level data with a highly granular map of water stress. MSCI ESG Research relies on WRI Aqueduct’s baseline water stress indicator to gauge the degree of water risk faced by a company’s operations globally.