Morningstar to add ESG to global funds ratings
Morningstar will launch environmental, social, and governance (ESG) scores for global managed funds and exchange-traded funds later this year.
The research house will base its scores on ESG company ratings supplied by Amsterdam based firm Sustainalytics with Swiss private banking group Julius Baer the first Morningstar client to license the ESG scores for its fund research team.
Morningstar, Director of Manager Research - North America, Jon Hale said the ESG ratings are a natural extension of the group's funds rating work and would bring more transparency and accountability to the investment industry.
Morningstar will use the 4500 company ratings produced by Sustainalytics across the holdings of more than 200,000 global managed products to create asset-weighted composite ESG fund scores, based on company-level Sustainalytics ESG ratings.
It said this would provide investors with a fund comparsion across categories, relative to benchmarks, and over time using ESG factors with the ability to examine the scores for the environmental, social, and governance pillars.
The new fund scores are expected to be launched in the fourth quarter of 2015 and through Morningstar Data feeds and its major software platforms in 2016.
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Jason Spits
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