Full definition
One of the two global ESG rating leaders alongside Sustainalytics. Rates more than 17,000 issuers (equities and bonds) on an AAA-to-CCC scale, assessing them relative to their sector: an AA rating signals an ESG risk manager better than its peers, rather than an absolutely virtuous company. Methodology centred on financial materiality (ESG risks threatening value), unlike European double materiality. Ratings feed the MSCI ESG Leaders and Climate Change indices, widely used by global asset management.
Key figures
- 17,000+issuers rated by MSCI ESG Research, more than 990,000 securities covered
- AAA to CCC7-notch rating scale, relative to the sector (leader, average, laggard)
Questions and answers
Does a good MSCI rating mean a low-carbon company?
Not necessarily. MSCI measures exposure to financially material ESG risks and the quality of their management, relative to the sector. A well-governed oil company can be rated higher than a virtuous SME with poor documentation. For climate itself, look at the GHG inventory, the pathway and its SBTi validation.
How can you improve your MSCI ESG rating?
Documentation matters as much as performance: publish a complete GHG inventory, formal policies, dated targets and governance arrangements. Agencies rate what they can verify; unpublished information is treated as non-existent.