November 16, 2021

Morningstar’s Sustainability Ratings Coverage Expands by 25,000 New Funds with the Addition of Sustainalytics’ Country Risk Ratings

Investors now have access to ESG risk insights across more than 85,000 funds worldwide, spanning corporate and sovereign holdings

November 16, 2021, Toronto – Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, has expanded coverage of its Morningstar Sustainability RatingTM for funds by embedding Country Risk Ratings from Sustainalytics, a Morningstar company and a leading global provider of ESG research, ratings and data. The move makes the Morningstar Sustainability Rating available across more than 85,000 funds worldwide, including new coverage for approximately 25,000 multi-asset and fixed-income funds, that span both corporate investments and investments in countries, such as sovereign debt. Investors can access Morningstar’s Sustainability Ratings across flagship Morningstar platforms, including Morningstar.com®, Morningstar DirectSM and Morningstar® Advisor WorkstationSM.

In 2019, Morningstar enhanced its Sustainability Rating based on Sustainalytics’ ESG Risk Ratings, which measure the degree to which a company’s economic value may be at risk due to ESG issues. Incorporating Sustainalytics’ Country Risk Ratings in the latest methodology evolution advances Morningstar’s Sustainability Rating framework from a single sustainability score to a modular approach. Based on the new framework, investors can now obtain distinct sovereign and corporate portfolio scores and rankings, which roll-up to the overall Morningstar Sustainability Rating. The Morningstar Sustainability Rating now offers greater precision and transparency to investors, providing independent measures of ESG risk for corporations and countries.

“Investors with a fixed income focus are increasingly looking at how ESG risks may affect their funds and underlying holdings,” said Will Ridout, senior manager of product strategy and development at Sustainalytics. “Thanks to these enhancements, investors can assess the ESG risk of their sovereign exposure and integrate these considerations into their fund selection criteria. By offering visibility into our Corporate Sustainability Scores and Sovereign Sustainability Scores, Morningstar and Sustainalytics are offering investors a comprehensive assessment of ESG risk through multiple lenses.”

While Sustainalytics’ ESG Risk Ratings and Country Risk Ratings are based on similar principles and are designed to measure the degree of absolute ESG risk, the two ratings measure distinct forms of ESG risk. The ESG Risk Rating measures the risk to enterprise value, while Country Risk measures the risk to long-term economic development. Sustainalytics’ Country Risk Ratings assess national wealth including natural and produced capital, human capital, and institutional capital. The ratings also evaluate a country’s ability to use and manage these sources of capital in effective and sustainable ways.

For access to the latest sustainable investing analysis and insights from Morningstar, visit Morningstar.com/esg. To learn more about Sustainalytics’ Country Risk Ratings, please visit here. The Morningstar Sustainability Rating methodology and FAQ are available here.

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About Sustainalytics

Sustainalytics, a Morningstar Company, is a leading ESG research, ratings and data firm that supports investors around the world with the development and implementation of responsible investment strategies. For nearly 30 years, the firm has been at the forefront of developing high-quality, innovative solutions to meet the evolving needs of global investors. Today, Sustainalytics works with hundreds of the world’s leading asset managers and pension funds who incorporate ESG and corporate governance information and assessments into their investment processes. Sustainalytics also works with hundreds of companies and their financial intermediaries to help them consider sustainability in policies, practices, and capital projects. As of the date this release was published, Sustainalytics has more than 1100 staff members across 17 offices globally, including more than 500 analysts with varied multidisciplinary expertise across more than 40 industry groups. For more information, visit www.sustainalytics.com.

About Morningstar

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 $260 billion in assets under advisement and management as of September 30, 2021. The Company has operations in 29 countries. For more information, visit www.morningstar.com/company. Follow Morningstar on Twitter @MorningstarInc.

Morningstar's Equity and Manager Research Groups consist of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC, registered with and governed by the U.S. Securities and Exchange Commission. Ratings and analyses are based on Morningstar's Equity or Manager Research Group's current expectations about future events and therefore involve unknown risks and uncertainties that may cause such expectations not to occur or to differ significantly from what was expected. Ratings and analyses are subjective in nature and should not be used as the sole basis for investment decision, are not guarantees, and should not be viewed as an assessment of the creditworthiness of a security or separately managed account, or (if applicable) their underlying holdings. This press release is for informational purposes only; references to securities or a separately managed account investment strategy in this press release should not be considered an offer or solicitation to buy or sell the securities or to invest in accordance with that strategy.

Media Contacts:

Sarah Cohn
sarah.cohn@sustainalytics.com
P) +1 646.963.6944

Lee Reisch
lee.reisch@sustainalytics.com
P) +1 647 264 3775

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