Financial data firm’s research unit unveils ratings on thousands of firms in effort to drive transparency
As the interest and activity in ESG investing has gotten stronger, so has the demand for non-financial disclosures, sustainability ratings, and other information that helps responsible investors evaluate different companies based on their values and convictions. And it’s that demand that financial data firm MSCI aims to help satisfy with a new open resource.
The firm has announced that its subsidiary, MSCI ESG Research, is making a collection of ESG ratings information covering thousands of firms publicly available. Companies are rated on a scale from AAA to CCC, based on their exposure to ESG risks and how well they manage those risks compared to peers.
“ESG is increasingly being viewed by global investors as a critical factor for building better portfolios,” said MSCI Head of ESG Remy Briand. “We want to encourage open discussion among investors and companies on how to improve sustainability across the board and hope that making the MSCI ESG Ratings available to all will facilitate these discussions.”
The ratings are determined based on 1,000 data points from company disclosures and alternative information sources, covering 37 key issues that are reviewed on a weekly basis. Aside from machine learning and artificial intelligence, the company said it leverages a team of over 200 people to continuously monitor and update companies and deliver relevant ESG insights.
Through a search tool available on the MSCI website, users can view MSCI ESG Ratings on over 2,800 companies in the MSCI ACWI Index. Aside from ratings, the tool also provides information on a company’s ESG ratings history, its benchmark performance against peers, and key ESG-related issues that affect individual companies.
“The decision to make the MSCI ESG Ratings publicly available is part of a campaign to drive greater transparency in ESG,” Briand said, noting that MSCI also launched an ESG Fund Ratings system in July.
Plans have been announced to make ratings for 7,500 constituents of the MSCI ACWI Investable Markets Index available in 2020. MSCI ESG Research is also introducing a batch reporting service, which is intended to help its clients provide more comprehensive and frequent reports to their clients.
