Post by EVORA Global

MSCI #Sustainability Institute research indicates that properties with elevated Climate Value-at-Risk are still priced broadly in line with lower-risk peers. That suggests mispricing persists. History shows that financial markets tend to reprice stepwise, not gradually. Larry Fink, as CEO of BlackRock, in his annual letters, has repeatedly noted that capital will flow toward assets with credible #TransitionStrategies. Debt providers and insurers are beginning to incorporate forward-looking #CarbonExposure into underwriting. Never the less, across North America, the same asset can receive opposite market signals: California is pushing mandatory #ClimateTransparency through SB 253/SB 261, nudging lenders and insurers toward clearer, forward-looking pricing of carbon and #PhysicalRisk, while a wave of anti-#ESG measures in states like Texas (some since challenged in court) discourages overt climate consideration and public target-setting—blurring comparability across portfolios. Meanwhile, Canadian pensions add further divergence: CDPQ is accelerating real-economy transition finance (targeting C$400 billion by 2030), Ontario Teachers’ has pivoted to US$70 billion in climate-transition-aligned private investments by 2030, and CPP Investments dropped its formal net-zero-by-2050 pledge in 2025 amid legal risk concerns—each sending very different cues about what “credible transition” means for access to capital and pricing. Even within single firms and investor pools, client mandates and materiality can split into pro-ESG and anti-ESG sleeves, sending contradictory signals to the market and complicating capital allocation to decarbonized or transition-ready assets. Net effect: multiple, sometimes contradictory, signals across central banks, pensions, insurers, asset managers and investors and states create a muddled aggregate signal in North America. Even for markets with clear direction of travel, what has not yet arrived is the full repricing – but history shows that when markets correct mispriced risk, they do so suddenly, not gradually. Yet if markets are increasingly signaling the need for credible transition strategies, the challenge is that investors might have diminishing visibility into what progress actually looks like. 👉 Learn more in our latest whitepaper, 'The Delivery Gap' https://lnkd.in/eYmXNDKr #Decarbonization MSCI Inc.