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.
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.
Gain valuable insights on the potential economic and societal benefits of aligning with ESG standards, as well as the potential costs and disruptions.
Morningstar 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.
The ESG Risk Ratings research universe includes more than 16,300 analyst-based ESG Risk Ratings, spanning public equity, fixed-income, and privately held companies. Additionally, the universe has enhanced coverage of Chinese companies listed in Shanghai and Shenzhen, which are predominant regional contributors in emerging market indices.
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.
Identify and manage investment risks and opportunities with climate research, ratings and data for investors.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
The Raw Materials Crunch: Industry Risks Due to Physical Scarcity, Supply Concentration and Intense Demand
As demand for critical raw materials increases, due in part to the low-carbon transition, industries reliant on those materials face growing risks. In this article, discover what’s driving those risks.
Webinar Replay | Product Governance Risk: Navigating One of the Most Common ESG Issues
Join Morningstar Sustainalytics for a panel discussion about ESG risk exposure, what this means and how to manage. In this webinar, we will focus on how Sustainalytics identifies drivers of product governance risk.