Sustainalytics, a Morningstar Company, is a company that rates the sustainability of listed companies based on their

environmental, social and corporate governance ESG (environmental, social, and corporate governance) data reflect the negative externalities (costs to others) caused by an organization with respect to the environment, to society and to corporate governance. ESG data can be used by investo ...

(ESG) performance. The company was born of a merger between

Toronto Toronto ( ; or ) is the capital city of the Canadian province of Ontario. With a recorded population of 2,794,356 in 2021, it is the most populous city in Canada and the fourth most populous city in North America. The city is the anch ...

-based Jantzi Research, which was founded in 1992 by Sustainalytics' current CEO Michael Jantzi, and its European counterpart. Following its acquisition of GES International on January 9, 2019, Sustainalytics had more than 600 employees with offices in 17 cities around the world and over 700 institutional investor clients. On April 21, 2020, Morningstar, Inc. acquired the remaining ~60% of Sustainalytics' shares to become the sole owner.

Morningstar acquisition

In 2016, Morningstar, Inc. released the first sustainability rating for

mutual funds A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV ...

and

exchange-traded funds An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the ...

based on Sustainalytics' company ESG research. In 2017, Morningstar, Inc. become a 40% shareholder in the company alongside senior management, Stichting Pensioenfonds Zorg en Welzijn (PGGM),

ABN AMRO Group ABN or abn may refer to: Companies * ABN AMRO Group, a Dutch bank group * ABN AMRO, sometimes referred to as "ABN" in shorthand, is a Dutch state-owned bank * Algemene Bank Nederland, a now-defunct Dutch bank Radio, news and television organizati ...

and Renewable Partners On 21 April 2020, Morningstar Inc. completed the acquisition, purchasing the remaining 60% of the shares.

Yahoo! Finance

In 2018,

Yahoo! Finance Yahoo! Finance is a media property that is part of the Yahoo! network. It provides financial news, data and commentary including stock quotes, press releases, financial reports, and original content. It also offers some online tools for perso ...

started to include Sustainalytics' ESG score for over 2,000 companies. Retail investors will also be able to see if companies are involved in controversies or controversial products or practices, such as thermal coal and controversial weapons.

Green lending and green bonds

In 2017,

ING Group The ING Group ( nl, ING Groep) is a Dutch multinational banking and financial services corporation headquartered in Amsterdam. Its primary businesses are retail banking, direct banking, commercial banking, investment banking, wholesale bankin ...

issued the first sustainability improvement

loan In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that ...

where the interest rate of the loan is pegged to the sustainability rating of the lender,

Koninklijke Philips N.V. Koninklijke Philips N.V. (), commonly shortened to Philips, is a Dutch multinational conglomerate corporation that was founded in Eindhoven in 1891. Since 1997, it has been mostly headquartered in Amsterdam, though the Benelux headquarters is ...

, as measured by Sustainalytics. Sustainalytics also provides "second opinions" for corporate governmental issuers that assesses the framework of the issuer's green, social or sustainability bond. In 2017 and 2018, investors voted Sustainalyitcs as the "Most Impressive Second Opinion Provider" for this service in the GlobalCapital Sustainable and Responsible Capital Markets Awards 2017.

Emissions scandals

Sustainalytics flagged governance concerns at

Volkswagen Volkswagen (),English: , . abbreviated as VW (), is a German motor vehicle manufacturer headquartered in Wolfsburg, Lower Saxony, Germany. Founded in 1937 by the German Labour Front under the Nazi Party and revived into a global brand post-W ...

months before the 2015 Volkswagen emissions scandal. Sustainalytics had also flagged corporate governance concerns at

Fiat Automobiles Fiat Automobiles S.p.A. (, , ; originally FIAT, it, Fabbrica Italiana Automobili di Torino, lit=Italian Automobiles Factory of Turin) is an Italian automobile manufacturer, formerly part of Fiat Chrysler Automobiles, and since 2021 a subsidiar ...

18 months prior to the company being accused of breaking emissions laws in 104,000 diesel vehicles in January 2017

HBR's 100 best performing CEOs

In 2015,

Harvard Business Review ''Harvard Business Review'' (''HBR'') is a general management magazine published by Harvard Business Publishing, a wholly owned subsidiary of Harvard University. ''HBR'' is published six times a year and is headquartered in Brighton, Ma ...

started to include Sustainalytics' ESG Rating as part of its assessment of the 100 best performing CEOs in the world.

Indices

In 2000, Sustainalytics launched the Jantzi Social Index, the first socially-screened stock index composed of

Canadian Canadians (french: Canadiens) are people identified with the country of Canada. This connection may be residential, legal, historical or cultural. For most Canadians, many (or all) of these connections exist and are collectively the source of ...

companies, and, in 2013, Sustainalytics partnered with the United Nation's Global Compact to launch the Global Compact 100 index, a real-time stock index that tracks Global Compact signatories awarded a high ESG rating by Sustainalytics. On 10 September 2018, the

World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...

issued a sustainable development note linked to Sustainalytics' Global Sustainability Signatories Index, another index that tracks

United Nations Global Compact The United Nations Global Compact is a non-binding United Nations pact to encourage businesses and firms worldwide to adopt sustainable and socially responsible policies, and to report on their implementation. The UN Global Compact is a princi ...

signatories with high sustainability ratings. The note will not pay a coupon, but rather return the principle in addition to the positive return of the index.

References

{{reflist 1992 establishments in the Netherlands Companies based in Amsterdam Environmentalism Ethical banking Ethical investment Governance Market data