MSCI Must Measure Markets – Not Prescribe Corporate Investments

I still recall the first discussion I had years ago about index providers like MSCI. Back then, I thought these companies were simply quiet data suppliers – a bit dull, but indispensable. Today, I know better: they are among the most powerful forces in the world of finance. And that’s precisely what makes them so dangerous.
MicroStrategy has hit a sore spot by demanding that index providers should restrict themselves to pure market measurement. What was originally intended as a neutral benchmark has long since become a political tool. MSCI removes companies from its indices for climate protection reasons – a move that can cost businesses billions. At the same time, the index provider completely ignores entire industries like the crypto sector. Where’s the neutrality in that?
For me personally, the issue is particularly fascinating because it touches on something fundamental: Should a small group of companies decide which investments are publicly legitimate? MicroStrategy is right to argue that index providers have become de facto regulators – and that carries risks. Systematically excluding oil and gas companies could, in the long run, jeopardize energy security, even if these companies currently offer high returns. Meanwhile, other s



ectors benefit from this development without always having flawless practices themselves.
So, who controls this power? To date, a handful of providers decide based on their own criteria, often concealed under the guise of “sustainability” or “social responsibility.” It reminds me of the old debate about media power – who decides which news is important? Only here, the stakes are even higher.
MicroStrategy suggests that index providers should focus on measurable factors like market capitalization and liquidity – in other words, pure market performance. That sounds like a reasonable solution, but it’s hard to implement. Many investors and governments benefit from the current system. Just think of the state subsidies often tied to ESG-compliant investments.
Ultimately, it’s a balancing act between market mechanisms and moral guidelines. Should the financial industry decide which companies are “acceptable”? Or should it limit itself to reflecting reality – without passing judgment?
One thing is certain: this debate is far from over. And it could shape the financial markets of the future in decisive ways. I’ll remain intrigued – and I wonder how many investors are actually aware that their investments are steered by so few, powerful actors.