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What is an MSCI ESG Rating?

An MSCI ESG Rating is designed to measure a company’s resilience to long-term, industry material environmental, social and governance (ESG) risks. We use a rules-based methodology to identify industry leaders and laggards according to their exposure to ESG risks and how well they manage those risks relative to peers. Our ESG Ratings range from leader (AAA, AA), average (A, BBB, BB) to laggard (B, CCC). We also rate equity and fixed income securities, loans, mutual funds, ETFs and countries.

ESG Ratings video

ESG Ratings

How do MSCI ESG Ratings work? What are significant ESG risks? What does a poor rating look like? How can you use them?

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ESG ratings

How do MSCI ESG Ratings work?

 

How do MSCI ESG Ratings work?

 

ESG risks and opportunities can vary by industry and company. Our MSCI ESG Ratings model identifies the ESG risks, (what we call Key Issues), that are most material to a GICS® sub-industry or sector. With over 13 years of live track history we have been able to examine and refine our model to identify the E, S, and G Key Issues which are most material to an industry.


View our Key Issues framework   |  Methodology Excerpt



内嵌的应用

ESG Ratings Description 1

LAGGARD

A company lagging its industry based on its high exposure and failure to manage significant ESG risks


ESG Ratings Description 2

AVERAGE

A company with a mixed or unexceptional track record of managing the most significant ESG risks and opportunities relative to industry peers


ESG Ratings Description 3

LEADER

A company leading its industry in managing the most significant ESG risks and opportunities


Explore our ESG transparency tools

 

Explore our ESG Transparency Tools


ESG Ratings Corporate Search Tool

ESG Ratings Corporate Search Tool

Explore the MSCI ESG Rating and ESG Key Issues of over 2,800 companies.

ESG Industry Materiality Map

ESG Industry Materiality Map

Explore E, S & G Key Issues by GICS® sub-industry or sector and their contribution to companies' ESG Ratings.

What goes into an MSCI ESG Rating?

What goes into an MSCI ESG Rating?

Example: Explore the data metrics and sources used to determine the MSCI ESG Rating of a US-based producer of paper products.

ESG ratings Tabs

Integrating ESG Ratings into the investment process: Key Features

A growing body of client, industry and MSCI research has shown the value of integrating MSCI ESG Ratings to manage and mitigate risks and identify opportunities. We are proud to work with over 1,700 clients worldwide that help inform and improve our ESG Research, including our ESG Ratings methodology and coverage. Investor clients use MSCI ESG Ratings as follows. 

  • Stock analysis
  • ESG Ratings used for security selection or within systematic strategies
  • ESG Factor in quant model- identify long term trends and arbitrage opportunities
  • Adjust discounted cashflow models
  • Identify leaders and laggards to support construction
  • Use ratings and underlying scores to inform asset allocation
  • Stress testing, and risk and performance attribution analysis
  • ESG as a Factor in Global Equity Models
  • MSCI ESG Ratings are used in many of MSCI’s 1,500 equity and fixed incomes
  • Select policy or performance benchmark
  • Develop Exchange-Traded-Funds and other index-based products
  • Make regulatory disclosures
  • Report to clients & stakeholders
  • Demonstrate ESG transparency and leadership
  • Engage companies and external stakeholders
  • Provide transparency through client reporting
  • Conduct thematic or industry research

ESG rating Key benefits

Key Product Features:

We rate over 8,500 companies (14,000 issuers including subsidiaries) and more than 680,000 equity and fixed income securities globally (as of October 2020), collecting thousands of data points for each company.

 

Forward-looking industry materiality:

We monitor emerging risks and opportunities and focus on the industry issues that are most relevant to its companies’ core business models

 

Alternative data & models:

While corporate disclosure is an important input into our model, we also gather alternative data from hundreds of media, academic, NGO, regulatory and government sources to supplement those disclosures and uncover additional insights. Our cutting-edge modelling capabilities transform varied sources of unstructured data into meaningful insights

 

Tech-enabled human insights:

We use artificial intelligence (AI) and other technologies to increase the timeliness and precision of data collection and analysis, and to check and validate data. Our 200+ strong team of analysts review, validate and transform the data into meaningful insights

 

Client consultations and innovations:

MSCI ESG Research is constantly evaluating new datasets, monitoring emerging ESG issues and exploring new technologies to improve our research process and the value for clients. We review and recalibrate the ESG Ratings model annually, and seek feedback from our clients on potential changes and enhancements via our annual consultation process. Over the last seven years, MSCI ESG Research has consulted more than 55 of some of the largest investors globally, to refine our ESG Ratings methodology and expand our coverage

MSCI ESG Research Experience and Leadership

 

MSCI ESG Research Experience and Leadership

  • We have over 40 years2 of experience measuring and modelling ESG performance of companies. We are recognized as a ‘Gold Standard data provider’3 and voted 'Best Firm for SRI research' and ‘Best Firm for Corporate Governance research' for the last four years3
  • We were the first ESG provider to assess companies based on industry materiality, dating back to 1999. Only dataset with live history (13+ years) demonstrating economic relevance
  • Objective rules based ESG ratings, with an average 45% of data,5 coming from alternative data sources, utilizing AI tech to extract and verify unstructured data
  • First ESG ratings provider to measure and embed companies’ ESG risk exposure4

ESG Ratings Related Content

ESG ratings footnotes

 

GICS®, the global industry classification standard jointly developed by MSCI Inc. and S&P Global.

Through our legacy companies KLD, Innovest, IRRC, and GMI Ratings.

Deep Data Delivery Standard http://www.deepdata.ai/

Through our legacy companies KLD, Innovest, IRRC, and GMI Ratings. Origins of MSCI ESG Ratings established in 1999. Produced time series data since 2007.

Source: MSCI ESG Research 2,434 constituents of the MSCI ACWI Index as of November 30, 2017.