ESG Research Methodology

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MSCI ESG Research generates a rating of each company's management of the impact of its Environmental (E), Social (S) and Governance (G) activities. Each company is evaluated in terms of:

  • The environment (E)
  • Community and society (S)
  • Employees and its supply chain (S)
  • Customers (S)
  • Governance (G)

The diagram below details the range of ESG issues that are covered in each of these five categories:

Company_Graph_ESG_091710.jpg

The ESG Scoring Model

To determine a company's ESG ranking, MSCI ESG Research examines extensive data collected from various sources, such as company filings, media, governments, third-party data providers and NGOs.

Each company is assigned to one of more than 80 industry groups, each of which has a unique set of ESG rating data and weightings.

The research model generates numerous sub-scores for the company across each data category applicable to the industry group. The model aggregates the sub-scores to generate separate Environmental, Social & Governance scores for the company, which are ultimately expressed as a single composite ESG score.

A company's ESG score is mapped to a 9-point letter scale, with ratings from AAA (highest) to C (lowest). ESG ratings also determine peer group rankings for MSCI ESG best-in-class index methodology.