ESG Industry Materiality Map
MSCI ESG Ratings assess the resilience of companies to long-term, financially relevant environmental, social, and governance (ESG) risks. Our ESG Industry Materiality Map is a representation of the current ESG Key Issues and their contribution to companies' ESG Ratings. This map is part of our ESG Ratings transparency initiatives, through which we have made ESG Ratings of companies and funds accessible to the public.
To see the Key Issues assessed for companies in a specific GICS®1 sub-industry or sector, find the industry in the dropdown list or use the search bar on the right. Click here for more information.
The ESG Industry Materiality Map is a direct reflection of key features of the MSCI ESG Ratings model, which is:
We update our ESG Ratings methodology as key ESG issues evolve. We recalibrate the model, including identifying industry key Issues and setting weights, annually, based on the latest data and research as well as input from consultations with clients. Hence, stakeholders and the public should expect to see changes in our ESG Industry Materiality Map over time.
Key Issue weights are an important part of the MSCI ESG Ratings model. An evaluation of weight-setting schemes found that the industry-specific weight-setting methodology used by MSCI ESG Ratings outperformed equal-weighted and optimized weight-setting methodologies over a 13-year study period. The weights displayed in the ESG Industry Materiality Map represent the average Key Issue weight for companies in an industry. Key Issue weights are determined through a combination of two factors: 1) how much each industry contributes to the main externality connected to the issue as compared to other industries (for instance, how carbon-intensive the industry is relative to other industries) and 2) the time horizon within which the externality may materialize.
The foundation for the ESG Industry Materiality Map is an industry-specific evaluation of key ESG risks and opportunities. However, the ESG Industry Materiality Map also reflects company-specific nuances that may not be captured by the industry classification. The lines of business, production processes used, and regions where a company operates are among the determinants of ESG risk. Rules-based model variants take these nuances into account, meaning that not all companies in a given industry are necessarily rated on all the same highlighted Key Issues. Since the ESG Industry Materiality Map includes company-specific Key Issues, issues that are only applied to a small proportion of the industry will appear to have a low "average" weight.
Source: MSCI ESG Research LLC. Average Key Issue weights calculated as of January 31, 2022.
1. GICS®, the global industry classification standard jointly developed by MSCI Inc. and S&P Global.
This information may not be used for corporate financing purposes (including, without limitation, ESG-linked loans, credit facilities, securities or structured products), as a basis for any financial instruments or products (including, without limitation, passively managed funds and index-linked derivative securities) or other products or services, to manage any funds or portfolios, to verify or correct data in any other compilation of data or index, to create any derivative works, nor to create any other data or index (custom or otherwise), without MSCI's prior written permission.
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