Morningstar and Sustainalytics Expand Their Sustainability Collaboration

In August 2015, the two firms announced a strategic collaboration that resulted in the March 2016 launch of the Morningstar Sustainability Rating™ for global mutual and exchange-traded funds (ETFs). The ratings, which now cover more than 35,000 mutual funds and ETFs, use Sustainalytics company-level ESG research, allowing investors to gauge how well companies held in their funds are managing ESG issues. The Sustainability Rating is available in Morningstar Direct^SM, Direct Cloud, Morningstar Office^SM, Advisor Workstation^SM, 15 global Morningstar websites, and Data Feeds. Building upon the Sustainability Rating and its work with Sustainalytics, in October 2016 Morningstar launched the Global Sustainability Index Family, a series of 27 global equity indexes designed to provide a standard for sustainability investing. In addition, Morningstar released company-level ESG metrics for the holdings of 35,000 mutual funds and ETFs and Morningstar Portfolio Sustainability Reports in April 2017, and a tool that enables investors to screen portfolios for various ethical issues in June 2017.

"Enhancing this relationship enables us to leverage the expertise Sustainalytics has built over the last 25 years, and build on the momentum we started with the launch of the Sustainability Rating," said Kunal Kapoor, Morningstar's chief executive officer. "We have the largest ESG fund coverage universe today, and we look forward to continuing to meet the increasingly sophisticated ESG needs and requirements of our clients through integrated solutions and innovative research that highlights good stewardship, lower costs, and transparency for investors."

The studies supporting the growth in responsible investing are plentiful. According to the Global Sustainable Investment Alliance, almost 30 percent of professionally managed assets today are associated with responsible investment strategies. At the institutional level, more than 1,700 asset managers, asset owners, and other financial market participants are now signatories to the U.N.-backed Principles for Responsible Investment (PRI), representing $62 trillion in assets under management.

"We welcome Morningstar as a new and significant shareholder," said Michael Jantzi, chief executive officer of Sustainalytics. "Close collaboration with Morningstar over the last two years has helped to broaden distribution of our ESG research, allowing Sustainalytics to work with more asset managers and owners to integrate ESG into their investment processes. Our entire executive team is excited about expanding our relationship with Morningstar and continuing to work together to bring meaningful ESG insights and innovative products and services to investors worldwide."

As part of the transaction, Steven Smit, head of sustainability at Morningstar, will join the Sustainalytics board of directors and the Sustainalytics executive team has taken a minority equity stake in the company.

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, retirement plan providers and sponsors, and institutional investors in the 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, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $200 billion in assets under advisement and management as of March 31, 2017. The company has operations in 27 countries.

About Sustainalytics
Sustainalytics is an independent ESG and corporate governance research, ratings and analysis firm supporting investors around the world with the development and implementation of responsible investment strategies. With 13 offices globally, Sustainalytics partners with institutional investors who integrate environmental, social and governance information and assessments into their investment processes. Today, the firm has more than 300 staff members, including 170 analysts with varied multidisciplinary expertise of more than 40 sectors. Through the IRRI Survey, investors selected Sustainalytics as the best independent responsible investment research firm for three consecutive years, 2012 through 2014, and in 2015 and 2016 Sustainalytics was named among the top three firms for both ESG and Corporate Governance research. For more information, visit www.sustainalytics.com.

©2017 Morningstar, Inc. All Rights Reserved.

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SOURCE Morningstar, Inc.

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