October 27, 2021

Morningstar Indexes Introduces EU Climate Indexes

Morningstar Indexes Introduces EU Climate Indexes

New indexes help investors navigate the transition to a low-carbon, climate-resilient world while meeting EU regulatory requirements, another step in rapid global expansion for Morningstar’s index business

LONDON, Oct. 27, 2021— Morningstar Indexes, part of Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today introduced the Morningstar EU Climate Indexes to help investors progress toward meeting EU Climate Transition Benchmarks (CTB) and Paris-Aligned Benchmarks (PAB) requirements. This new climate index series from Morningstar allows investors to target companies within a broad market index that are on track for decarbonization in line with Paris accord targets, while minimizing tracking error against the parent index. The series combines Morningstar core benchmarks with carbon emissions data and Carbon Risk Ratings from Sustainalytics, a Morningstar company and leading global provider of ESG research, ratings and data.

This new climate index suite from Morningstar adds to its growing investment in market indexes and data to support global investors. In September, Morningstar announced the acquisition of Moorgate Benchmarks, a Europe-based global provider of index design, calculation, and administration, appointing Moorgate Benchmarks CEO Tobias Sproehnle as head of Morningstar Indexes in Europe reporting to Ron Bundy, president of Morningstar Indexes.

“As we approach the start of COP26, global investors are more focused than ever on climate change and asking for more advanced measures to track progress in meeting their commitment to carbon neutrality,” said Sproehnle. “Our new EU Climate Indexes, which harness the power of Morningstar through our Indexes and Sustainalytics teams, combined with focused ESG education and insights via Morningstar’s EU Sustainable Finance Action Plan Resources help clients address the complexity of climate policy in order to meet regulatory requirements and create more focused investment strategies.”

According to a recent ESG survey of global asset managers by the Index Industry Association, 63% of investment companies cite a lack of quantitative data as a major or moderate challenge to ESG implementation and 64% cite a lack of transparency or insufficient corporate disclosure in relation to firms’ ESG activities. Morningstar is helping to address this challenge in Europe, developing a range of resources through its policy, research, Sustainalytics and Indexes teams to help clients tackle these challenges and navigate through the evolving points of the EU Action Plan.

To support the EU Climate Benchmarks introduction, Morningstar Indexes Strategist Dan Lefkovitz has co-authored a new research paper – Beyond “Net Zero:” Supporting the Transition to a Climate-Resilient Planet – with Morningstar Indexes, Morningstar EU Policy and Sustainalytics colleagues. The paper encourages investors to verify global companies “net zero” pledges using leading climate data and research. “Investors today need to look beyond corporate net zero pledges,” according to Lefkovitz. “They must separate the businesses paying lip service from those taking measurable steps to reduce greenhouse gas emissions and adapt their business models to combat climate change.”

About Morningstar, Inc. 

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers and owners, retirement plan providers and sponsors, and institutional investors in the debt and private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $251 billion in assets under advisement and management as of June 30, 2021. The Company has operations in 29 countries. For more information, visit www.morningstar.com/company. Follow Morningstar on Twitter @MorningstarInc. 

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