Knowing how exposed and how well your portfolio companies manage their material ESG issues is a critical part of making well-informed investment decisions.
That is 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.
NEW! Covering more than 16,000 companies, Morningstar Sustainalytics has the widest coverage of analyst-based ESG Risk Ratings in the market. The newly expanded universe includes public and private companies, fixed-income issuers and listed Chinese companies and allows investors to support diversified investment strategies.
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.
Global ESG Universe
New Global ESG Universe has the widest coverage of analyst-based ESG Risk Ratings in the market and covers over 16,000 issuers. The expanded universe includes public companies, private companies, and fixed-income issuers across developed, emerging and frontier markets. Also, the universe has enhanced coverage of Chinese companies listing A and/or B shares.
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+).
16,000+ Companies Covered
Sustainalytics' ESG Research and Ratings span more than 16,000 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 800 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.
30 Years of ESG Expertise
800+ ESG research analysts across our global offices.
A Leading SPO 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
ESG Data Market Gaps: 3 Areas of Interest for Investors Measuring Material ESG Risk
Many global investors already incorporate ESG factors into their evaluation of public companies across developed markets. We are now observing increasing interest in applying ESG considerations across a broader set of asset classes and regions.
The Role of Sustainable Aviation Fuel in Achieving Decarbonization by 2050
Meeting the aviation's industry's goal of decarbonization by 2050 will require a collective effort and more ambitious measures than those currently in place, including carbon offsetting, route optimization, fuel efficiency and fleet renewals that involve a shift to more eco-friendly aircraft. However, all of these measures still revolve around fossil fuels as a source of energy.
Telecom Network Outages, the ESG Risks of a Connected World
The telecom industry is exposed to several Material ESG Issues, including Data Privacy and Security, Business Ethics, Human Capital and Product Governance. Product Governance issues in the telecom industry include service quality, maintaining reliable, high-speed networks, and responding to customer billing concerns.