Knowing how exposed and how well your portfolio companies manage their material ESG issues is now a critical part of making well-informed investment decisions.
That's why the world's leading investors rely on our ESG research and ratings for a consistent approach to evaluate financially material ESG issues that affect the long-term performance of their investments.
Learn more about why Sustainalytics’ ESG Research and Ratings are the industry standard.
Overview of Sustainalytics’ ESG Risk Ratings
Sustainalytics’ ESG Risk Ratings measure a company’s exposure to industry-specific material ESG risks and how well a company is managing those risks. This multi-dimensional way of measuring ESG risk combines the concepts of management and exposure to arrive at an absolute assessment of ESG risk. We identify five categories of ESG risk severity that could impact a company’s enterprise value
The Rigor and Comprehensiveness that the World’s Leading Investors Count On
Absolute Measure of ESG Risk
A sophisticated methodology for rating absolute ESG risk, while enabling best-in-class analysis. Company ratings are comparable across peers and subindustries and allow for easy aggregation at the portfolio level.
Multiple Exposure Factors
Deep insights from multiple exposure factors, including business model, financial strength, geography and incident history.
Integrated Corporate Governance Information
Fully integrated, comprehensive corporate governance research and ratings.
Transparent methodology with multiple levels of data and qualitative insights to provide clients with custom ESG solutions.
Two-Dimensional Materiality Framework
Two-dimensional materiality framework measures a company’s exposure to industry-specific material risks and how well a company is managing those risks.
Three Central Building Blocks
Corporate governance, material ESG issues, and idiosyncratic issues (black swans) form the three central building blocks of our ESG research and ratings.
Five Risk Levels
The ESG Risk Ratings are categorized across five risk levels: negligible (0-10), low (10-20), medium (20-30), high (30-40) and severe (40+).
13,000+ Companies Covered
Sustainalytics' ESG Research and Ratings span more than 13,000 companies and encompass most major global indices.
20 Material ESG Issues
The ratings framework is supported by 20 material ESG issues that are underpinned by more than 300 indicators and 1,300 data points.
The ESG Risk Ratings are available through Global Access, Datafeeds and API as well as several third-party distribution platforms.
Human Insights Supported by AI Efficiency
Daily News Monitoring
AI-powered Digital Content Curation
Research analysts leverage smart technologies to enable them to monitor more than 60,000 media sources, and up to one million news articles daily.
Robust Annual Update Cycle
- Company profiles updated annually with corporate reporting cycle
- Alternative data sources, like regulatory filings on product recalls and NGO sources, augment self-reported corporate data
- Analysis by a team of over 350 ESG research analysts supported by artificial intelligence powered descriptive and predictive analytic capabilities
- Robust quality control mechanisms with peer reviews by senior analysts and company feedback mechanisms
About Our Framework
Investor Use Cases
Multi-dimensional ESG risk scores can be incorporated into equity or bond valuation models and aggregated at the portfolio-level.
Best-in-Class Investment Analysis
Comparable company scores support flexible applications for best-in-class analysis, including subindustry, sector or regional approaches.
Screening and Benchmarking
Overall Risk Ratings and material ESG issue scores support risk-based ESG screens and enable robust benchmarking across and within sectors and subindustries.
Scores on material ESG issues support thematic investment themes and provide meaningful new input for fund and index creation.
Engagement and Voting
Material ESG issue framework effectively supports engagement with companies on priority ESG issues and informs voting decisions on E&S shareholder resolutions.
Company ratings are categorized across five risk levels: negligible, low, medium, high, and severe and represented by our ESG Globes icons.
A company’s risk is measured against its industry peers and against the global universe.
Qualitative analysis, underpinned by analyst insights and quantitative data, describes the reasons why a company is exposed to specific material ESG issues and explains how well a company is managing these issues.
Material ESG Issues (MEIs) are identified and brought into focus.
Transparency into company events that may impact a company’s operations, stakeholders or the environment.
The magnitude to which a company is exposed to ESG risk and how well the company is managing that risk is measured and explained.
A Single Market Standard
Consistent approach to ESG assessments across the investment spectrum.
Award-Winning Research and Data
Firm recognized as Best ESG Research and Data Provider by Environmental Finance and Investment Week.
End-to-End ESG Solutions
ESG products and services that serve the entire investment value chain.
25+ Years ESG Expertise
500+ ESG research analysts across our global offices.
Largest Second-Party Opinion Provider
As recognized by Environmental Finance and the Climate Bonds Initiative.
Leverage our carbon research to align your portfolio to the future low-carbon economy.Learn More
Engage on the most material ESG risks identified by the ESG Risk Ratings.Learn More
Best-in-class equity index that features reduced ESG risk profile with low to moderate tracking error.
High Income generating equity investments focused on total returns with reduced ESG Risk.
Diversified corporate bond portfolio that avoids bonds with high ESG risk relative to their sector peers.
Exposure to companies that have distinct competitive advantages as well as low ESG Risk.
Related Insights and Resources
COP 26: A Spotlight on Emerging Climate Action Themes for Investors
Reactions to the COP26 Conference and the resulting Glasgow Climate Pact have predictably run the gamut from claims of greenwashing to the celebration of progress in the fight against climate change. Ultimately, any judgement on COP26 may be premature, as the success of the conference will best be measured in time by the extent to which commitments made are put into motion. While we wait to see the concrete actions that materialize, the past two weeks have underscored the importance of several themes that will garner increasing attention and should be considered by sustainable investors.
The Impact and Cost of Air Pollution: U.S. Petroleum Refineries
Investors can examine to what extent petroleum refiners manage their Non-GHG Air Emissions and assess the quality of a company's programs to reduce air pollutants. For instance, examining all the petroleum refiners assessed by Sustainalytics, we observe that only 3% have a strong program to manage non-greenhouse gas emissions.
Momentum Around Principal Adverse Impact Data Remains Strong Despite SFDR Delays
Despite the shifting timelines, we observe that the market momentum around PAIs is not diminishing, quite the contrary. Investors in the scope of the regulation are using the fourth quarter of this year to get acquainted with PAI data and set up their systems. Most investors we speak with want to be prepared in time to be able to monitor PAIs throughout 2022 and adjust their portfolios to boost their PAIs (or rather limit the downside, as these are adverse impact indicators). This means that PAIs may significantly impact stock selection and portfolio construction by fund managers keen to have ‘good’ PAI scores.