Discover why the world's leading investors rely on Morningstar Sustainalytics’ ESG research and ratings for a consistent approach to evaluate financially material ESG issues.
Our data and research serve use cases across the investment value chain including security selection, screening of companies and funds, product research and fund selection, and reporting.
Now, Sustainalytics is proud to announce our ESG Risk Ratings Expanded Universe. This expansion brings our universe coverage to 16,000 issuers, and offers the largest, most expansive analyst-based ESG coverage in the industry. Significant coverage increases in fixed income, private markets, and Chinese companies are represented in the expansion to align market needs.
ESG Risk Ratings Overview
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 utilizes multiple exposure factors, including business model, financial strength, geography, and incident history to calculate risk. We then determine how well that risk is managed, utilizing factors such as stated policies and procedures and current incidents and events. These factors are then combined into an absolute assessment of risk at the industry and subindustry level. Security-level data can be compared across subindustries, or easily aggregated at the fund or portfolio level.
Absolute Measure of ESG Risk
We provide 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 fund and portfolio level.
Multiple Exposure and Management Factors
Our deep insights generated by 800+ ESG research analysts include consideration of multiple exposure factors, including business model, financial strength, geography and incident history. Management factors include both stated policies and procedures as well as idiosyncratic issues (black swan events) that demonstrate how well those policies are being enacted.
Transparency
We utilize a transparent methodology with multiple levels of data and qualitative insights to provide clients with custom ESG solutions.
Industry Leading Client Service
Our team of highly trained and deeply knowledgeable client success managers are standing by and readily available to help you integrate ESG as a part of your firm's day-to-day workflows.
Breadth and Depth of Coverage
Sustainalytics’ ESG Research and Ratings span more than 16,300 companies and encompass most major global indices. The ratings framework is supported by 20 material ESG issues that are underpinned by more than 300 indicators and 1,300 data points.
Flexible Accessibility
The ESG Risk Ratings are available through Global Access, Datafeeds and API as well as several third-party distribution platforms.
Clear and Understandable Ratings System
Ratings are expressed on a global scale of 1-100. This provides a clear risk signal that is easily understood and allows for easy comparability between securities. This rating is also expressed from one to five globes (high to negligible risk).
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 swan events) 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, or five globes), low (10-20, or four globes), medium (20-30, or three globes), high (30-40, or two globes) and severe (40+, or one globe).
Security and Fund Level Analysis
Rich Security Level Analysis
Coverage of over 16,000 companies. 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 those issues. Multiple exposure and management factors are considered. Company risk is measured against its industry peers and against the global universe.
Fund and Portfolio Level Aggregation
The consistency of the numerical rating, and rating of securities both on the subindustry and global level allows for easy aggregation and clarity in reporting at the fund and portfolio level. Our ESG Risk Ratings support the sustainability ratings for 80,000 managed products globally.
Use Cases
Security Selection and Company Research
Transparent methodology and robust data provide deep and broad insights into a company’s ESG risk. Comparable company scores support flexible applications for best-in-class analysis, including subindustry, sector or regional approaches. Sustainalytics’ ESG risk ratings look not only at ESG performance, risk, exposure, and risk management, but also surface controversial events.
Screening of Companies and Funds
Overall Risk Ratings and material ESG issues scores support risk-based ESG screening and enable robust benchmarking across and within sectors and subindustries.
Product Research and Fund Creation
Cross-sector comparability and broad, deep insights allow you to research and delve into funds to ensure alignment with stated ESG objectives. Global risk score allows for easy comparability across sectors, providing meaningful input for creation of funds, indexes, and portfolios that integrate ESG risk as a material consideration in a well-diversified and balanced manner.
Reporting
Communicate sustainability performance and commitment through ESG reporting to clients. Granular portfolio reporting allows you to show alignment with client risk tolerance and investment preferences. This alignment can differentiate your firm and deepen client relationships. Our globe rating provides a clearly understandable assessment of risk, rating securities and funds from one globe (severe risk) to five globes (negligible risk).
Why Sustainalytics?
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.
