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S&P and MSCI unveil ESG rating tools amid wider transparency

S&P Global and MSCI publish ESG scores and rating tools for funds and indices


Natalie Kenway

S&P Global and MSCI have announced the publication of new ESG scores and ESG rating tools for funds and indices

S&P launches ESG scores after SAM acquisition

S&P Global has announced the launch of its proprietary ESG scores covering more than 95% of global markets

The scores are based on SAM’s – the data company S&P Global acquired in January 2020 – Corporate Sustainability Assessments (CSA), which are an annual evaluation of companies’ sustainability practices.

Each year, SAM carries out the CSAs on 7,500 companies focusing on criteria that is both industry-specific and financially material.

The scores use methodology developed over 20 years and builds upon S&P’s ESG indexing and benchmarking businesses. They will be made available to the investment community through Xpressfeed S&P Global Market Intelligence’s data feed management solution. The group said this will enable investors to bring S&P Global ESG Scores together with over 200 other datasets, including point-in-time financials, Trucost Environmental Data, Panjiva Supply Chain Intelligence, people data, ownership, corporate relationship, key developments, and more.

SAM’s annual CSAs have also powered the Dow Jones Sustainability Index and serve as analytical tools for S&P Dow Jones Indices’ core ESG index offerings including the S&P 500 ESG Index.

Martina Cheung, president of S&P Global Market Intelligence, commented: “We are seeing more and more decision-makers across all segments leverage the benefits of Xpressfeed to accelerate data integration and analysis for their business strategy. The S&P Global ESG Scores are backed by 20 years of SAM’s comprehensive assessments enabling market participants to optimize their portfolios and allocate capital towards positive ESG performance.”

Evan Greenfield, global head of ESG at S&P Global, added: “The S&P Global ESG Scores are driven by deep corporate engagement derived from private and public data, making the scores unique in the market today. For the first time ever, investors will have access to scores based on more than two decades of ESG expertise, a leading methodology centered around financial materiality, and a focus on forward looking sustainability metrics.”

MSCI unveils ESG fund ratings and index search tools

MSCI has announced it will be making its ESG fund ratings for 36,000 multi-asset funds and ETFs public for the first time.

Rated by MSCI ESG Research, the ratings will be made available on the group’s website.

The MSCI ESG Fund Ratings search tool provides fund selectors with the rating of the fund, its peer and global rank, and other ESG metrics such as green vs brown revenue, board independence and diversity and social screens such as tobacco.

Meanwhile, the MSCI Index Profile search tool will enable users to view index level ESG metrics for all of its EU-regulated equity and blended indexes, and information on whether these indexes include ESG criteria.

The latter tool has been launched to comply with a new EU regulatory requirement for benchmark administrators. The firm said as part of its efforts to help standardize ESG disclosures, MSCI has disclosed index-level ESG metrics for all of its EU Benchmark Regulation (BMR) equity and blended indexes, with fixed income indexes to follow in the coming weeks. Metrics are available for both ESG and non-ESG indexes, which will allow investors to better access sustainability information for their investment decisions, it added in a statement.

Remy Briand, head of ESG at MSCI, said the tools helps drive awareness, educates the market and raises ESG disclosure standards.

They also form part of a wider transparency initiative to provide comparable ESG metrics at the company, fund and index level – last November MSCI released ESG ratings for 2,8000 issuers.

Briand added: “We are firm believers that enhanced transparency and comparability is fundamental to ensuring broader adoption of ESG indexes, and in driving capital towards more sustainable investments.”