Henry A. Fernandez
Chairman and Chief Executive Officer at MSCI
Thank you, Jeremy. Welcome, everyone, and thank you for joining us today. In the third quarter, MSCI delivered another strong performance despite significant turmoil and dislocation in financial and commodity markets around the world. We posted organic recurring subscription run rate growth of over 14% and adjusted EPS growth of 12.6%. We achieved our best third quarter ever of net new recurring subscription sales, growing at 26%. In addition, our retention rate was 96.4%, up by 188 basis points from a year earlier. In terms of capital management, we repurchased another $235 million worth of MSCI shares through October 24. For the year as a whole, our total share repurchases now stand at approximately $1.3 billion.
This performance demonstrates the resilience and adaptability of MSCI's all-weather franchise. There is no question that the global economy faces major headwinds. These headwinds have created challenges for all companies, including MSCI. Yet they have also created a massive opportunity for us to differentiate ourselves and to show to both clients and shareholders the power of our all-weather franchise. At moments of extreme volatility and high uncertainty, investors become more reliant in high-quality data, insightful models and relevant research. They want a clear blueprint for navigating choppy waters. MSCI's tools can help them design one. Indeed, our solutions take on even greater importance during periods of elevated global risk.
In other words, this is the time when what we do best matters most, and we fully intend to demonstrate it. Our third quarter performance showed continued strength across client segments and product lines. In Index, we delivered our highest subscription run rate growth in a decade at 12.6%, and the listed futures and options trading volume linked to MSCI indices increased by 21%. In Analytics, we achieved our highest retention rate ever at 95.9%. We also posted subscription run rate growth excluding foreign exchange of 97% in Climate and 35% in ESG ex Climate. All of these numbers illustrate how MSCI is capturing key market trends. As the indexing trend continues beyond market capitalization indices, we are meeting investor demand for tools to support more customized and personalized portfolio construction and highly specialized outcomes.
Likewise, as global economic pressures accumulate, we are providing the risk analytical tools investors need to stay ahead of the turmoil. Meanwhile, as ESG becomes increasingly mainstream, we are helping investors measure the full scope of sustainability risks, capitalize on sustainability opportunities and achieve sustainability objectives. For all the political noise and controversy around ESG, the simple fact is that sustainability risks are financial risks and will continue to be so. Investors know this. In fact, a recent PwC report found that "81% of institutional investors in the U.S. along with 84% in Europe, both plan to increase their allocations to ESG products over the next two years." The same report projected that ESG-related assets under management will reach nearly USD34 trillion globally by 2026, an 84% increase from 2021.
It is important to underscore that as our ESG product line becomes more diverse with many different use cases and client types, ESG sales growth will naturally fluctuate based on market shifts, cyclical conditions and regulatory development. Right now, the world is simultaneously witnessing global energy and food crisis; the largest European war in almost 80 years; the biggest inflation surge in decades; rapidly rising interest rates; and COVID lockdowns in China, which continue to affect supply chain. At the same time, MSCI remains bullish on ESG's long-term potential. If anything, the main factors driving ESG growth from greater environmental and social awareness to demographic shifts will become even more powerful in the years ahead. As for climate specifically, there is no turning back in the raise to net-zero emissions. While the global energy crisis has created new obstacles to decarbonization, policymakers continue to embrace bold green investment plans.
Here in the U.S., president Biden recently signed the most aggressive climate law in American history. In Europe, governments enacted or proposed a wide range of measures that would speed up the low-carbon transition. These include more ambitious decarbonization and clean energy targets, policies to maintain or expand nuclear power and a USD5.4 billion hydrogen project. For our part, MSCI will continue building a robust and dynamic Climate franchise. Two Climate wins in the third quarter deserve special attention because they demonstrate our emergence as a leader in this area. First, the California State Teachers' Retirement System, CalSTRS, approved a plan to cut their portfolio emissions in half by 2030. To help them get there, they proposed -- they endorsed a proposal for 20% of their public equity assets to track the MSCI ACWI Low Carbon Target Index.
This means CalSTRS will now have nearly $27 billion allocated to tracking that index. Second, the New Zealand Super Fund announced that it had moved roughly 40% of its total investment portfolio to track the MSCI World Climate Paris Aligned Index and the MSCI Emerging Markets Climate Paris Aligned Index. That 40% translates into NZD25 billion or about USD15 billion. Each win represents a milestone on our climate journey. As I have frequently said, MSCI aspires to be the number one provider of climate solutions to the global finance and investment industries. We recently published a net-zero guide for asset owners, outlining concrete steps for decarbonizing portfolios. We also hosted White House national climate adviser, Ali Zaidi, at our New York offices during Climate Week. That same week, we joined with the Glasgow Financial Alliance for Net Zero, or GFANZ, to help launch a proposed climate data public utility.
All of this has helped MSCI generate strong momentum during the run-up to COP27 in Sharm El Sheikh, Egypt. In Climate, ESG, Analytics, Index and other areas, MSCI continues to benefit from our mission-critical solutions, our diversified client base and our commitment to financial discipline. Right now, many companies are retrenching and turning inward. MSCI is doing quite the opposite. Even as we reallocate resources, we continue investing in key differentiators using our Triple-Crown investment framework. More than that, we continue to attract talent, pursue MP&A opportunities, double down on client-centricity and reinforce our competitive advantages. All of this will help us emerge even stronger when the current market turmoil subsides.
And with that, let me turn the call over to Baer. Baer?