May 14, 2020

Can you discuss any product introductions or ways to benefit from the rising importance of ESG? How much of your revenues can be traced to ESG? Can you discuss how the Sustainalytics acquisition fits into your ESG strategy and how you see the competitive landscape in ESG?

Creating innovative, thought leading ESG data and research is central to our mission of empowering investor success, and by extension, our business strategy. Whether in the public or private markets, or up and down the capital structure, we see many opportunities to integrate ESG across Morningstar. We are making ESG factors more visible to investors, including them within our methodologies, research insights and commentary, data and ratings, and investment solutions. For example, in January 2020, we introduced fund level sustainable attributes data, which allows investors to identify funds that are intentional about ESG strategies. As another example, in March 2020, Morningstar DBRS published how it considers ESG factors in its credit research.

We believe ESG will move to the forefront of investing, empowering both today’s investors and the future generation. One of our near-term priorities is to improve the accessibility of ESG data for all investors, and we have already enabled the availability of Sustainalytics data directly through Morningstar data feeds. We’ve also focused on building out portfolio-level ESG metrics for financial advisors and individual investors, bolstering our ESG index offerings, and widening the use of ESG factors in the credit ratings space. We believe that one of the primary differentiators between us and competitors like MSCI is that our solutions are more “open source” in that we make our data widely available to investors of all kinds.

We do not separately track revenues related to specific market segments or products that incorporate ESG factors; however, we are experiencing early success with solutions that incorporate ESG data and research into them, including in our Managed Portfolios. We are seeing a high level of interest in ESG across all our business, regions, and market segments.

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