The LSE Directory / Data providers
Morningstar Sustainalytics is an independent provider of environmental, social and governance (ESG) research, ratings and data, serving institutional investors, asset managers, banks and corporate issuers worldwide. Its flagship ESG Risk Ratings assess a company's exposure to industry-specific material ESG risks and how well that company manages them, scoring companies on a scale from negligible to severe risk across a research universe the firm states covers more than 16,000 companies in public equity, fixed income and private markets. The ratings draw on more than 200 indicators and roughly 1,800 underlying data points per company, compiled by a research team the firm describes as more than 800 ESG analysts working out of offices in multiple financial centres. The firm differentiates itself from peer ESG raters through a two-dimensional materiality framework that separates a company's raw exposure to an ESG issue from the quality of its management response, rather than producing a single blended sustainability score. Beyond the core ratings, it sells a broader suite built around the same research base: Controversies Research, Country Risk Ratings, carbon and product-involvement data, EU Taxonomy and CSRD/SFDR regulatory compliance tools, Physical Climate Risk Metrics and Low Carbon Transition Ratings, and use-of-proceeds opinions for green and sustainability-linked bonds. Customers are mainly institutional investors integrating ESG into portfolio construction and screening, and corporate issuers seeking a rating to disclose or benchmark against, rather than retail users. The business traces to Jantzi Research, founded in Toronto in 1992 by Michael Jantzi, which merged with a European ESG research counterpart to form Sustainalytics, headquartered in Amsterdam. Morningstar acquired an initial 40 percent stake in 2017 and completed its purchase of the remaining shares in July 2020, in a deal reported at the time to value the business at roughly 170 million euros including earnout payments tied to 2020 and 2021 revenue; Sustainalytics further acquired GES International in January 2019. The firm's ratings have a track record predating the Morningstar deal, including flagging governance weaknesses at Volkswagen ahead of its 2015 emissions scandal and at Fiat Chrysler roughly eighteen months before 2017 diesel-related accusations against that company, episodes cited in independent coverage of the firm's history. In 2024, Morningstar Sustainalytics announced what it described as the most significant update to the ESG Risk Ratings methodology since the ratings launched, including a redesigned governance assessment component intended to make governance scores more dynamic and responsive to company-specific events.
