Morningstar launches ESG ratings for funds

Added 2nd March 2016

The research firm has introduced a rating system that helps investors evaluate funds based on environmental, social and governance factors.

Morningstar launches ESG ratings for funds

The Morningstar Sustainability Rating intends to show how well funds are managing the ESG risks and opportunities of the companies in their portfolios.

The rating system, developed in partnership with ESG-researcher Sustainalytics, will apply scores at both the fund and category levels starting today.

Morningstar said it will rate 20,000 mutual funds and exchange traded funds globally.

“Many investors are interested in sustainable investing but unsure how to put it into practice,” said Jon Hale, the firm’s newly-named head of sustainability research.  “Our new rating makes it easier to compare funds based on their ESG attributes.

“Some firms say that they invest according to sustainability principles, but it’s been hard to verify. Now investors can draw their own conclusions, using an independent, robust check of that claim that’s based on comprehensive analysis of a fund’s holdings.”

The scores are initially available in Morningstar DirectSM, the company's research platform for asset managers and wealth management professionals, and Morningstar OfficeSM, the practice management system for independent financial advisers.

In the coming weeks, the firm said it plans to launch the ratings on Morningstar Advisor WorkstationSM and

In Asia, investors have been slow to accept ESG principles compared to Europe and the US.

Last year, a Morningstar study found that developed Asia’s socially-responsible funds had investment outflows over time compared to inflows for other regions.

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address


FSA Investment Forums: Singapore & Hong Kong 2016

Singapore, Tuesday 25th October

Hong Kong, Thursday 27th October

FSA Investment Forum: Manila 2016

Wednesday 23rd November