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ESG Risk Rating Methodology Update 

September 2025

Page last updated April 2025

 

 

Enhanced Clarity on Event Risk Signals

In September 2025, Morningstar Sustainalytics will refine its ESG Risk Rating methodology to enhance clarity on event risk signals by transitioning from a combined impact and risk assessment to a risk-only events approach. This will align with our focus on financially material ESG risks.  

 

Update Highlights

  • Category 1 and 2 Events will no longer impact the ESG Risk Rating scoring model. 
  • Category 1 and 2 Events will remain visible in the ESG Risk Rating report to indicate to institutional investor clients that we are aware of these controversial incidents. 
  • All Events will be assessed only from a risk perspective, i.e., the potential impact on enterprise value. 

For more information, please see details on the ESG Controversies Research Methodology Update: September 2025 here. 

 

 

Exhibit 1: Current Events Approach

 

 

Exhibit 2: New Events Approach