Overview
Morningstar Sustainalytics’ ESG methodologies are designed to be rigorous, systematic, independent, capable of justification and with focus on ensuring that the methodologies can be applied continuously and in a transparent manner.
We aim to write methodologies in a clear, understandable, and logical fashion, using consistent language (as far as reasonably practicable), and a minimum of industry jargon and acronyms. The ultimate objective is to ensure that methodologies are accessible and understandable to those who rely on them.
ESG Risk Ratings
Morningstar Sustainalytics’ ESG Risk Ratings evaluate the extent to which environmental, social, and governance (ESG) factors may pose financial risk to a corporate issuer’s enterprise value. The rating’s primary output reflects the extent of an issuer’s unmanaged ESG risk across key issues, including climate change, human capital, business ethics, and corporate governance.
Historical Methodologies
Historical Disclosure Tables
Controversy Ratings
Morningstar Sustainalytics’ Controversy Ratings evaluate a corporate issuer’s involvement in media-reported controversies that may present varying levels of financial risk and societal impact. The rating’s primary output reflects the severity of an issuer’s involvement in controversies across key environmental, social, and governance topics.
Historical Methodologies
Historical Disclosure Tables
Global Standards Screening
Morningstar Sustainalytics’ Global Standards Screening (GSS) evaluates a corporate issuer’s compliance with international norms and standards related to human rights, labour rights, the environment and business ethics. The rating’s primary output reflects an issuer’s compliance, non-compliance, or watchlist status across 10 key principles.
Historical Methodologies
Historical Disclosure Tables
Country Risk Rating
Morningstar Sustainalytics’ Country Risk Ratings evaluate the extent to which environmental, social, and governance (ESG) factors pose risks to a government issuer’s long-term prosperity and economic development. The rating’s primary output reflects the extent of an issuer’s ESG risk across three pillars of sovereign wealth: natural and produced capital, human capital and institutional capital.
Historical Methodologies
Historical Disclosure Tables
Low Carbon Transition Ratings
Morningstar Sustainalytics’ Low Carbon Transition Ratings (LCTR) evaluate how a corporate issuer’s projected Greenhouse Gas Emissions (GHG) compares to its fair-share emissions budget. The rating’s primary output reflects the extent to which the issuer’s emissions trajectory is aligned with limiting global warming to 1.5°C above pre-industrial levels, in line with the Paris Agreement.
Historical Methodologies
Historical Disclosure Tables
Carbon Risk Ratings
Morningstar Sustainalytics’ Carbon Risk Ratings evaluate the extent to which carbon emissions issues may pose financial risk to a corporate issuer’s enterprise value. The rating’s primary output reflects the extent of the issuer’s unmanaged carbon risk across its operations, products and services, and financing activities.