MSCI ESG Rating

1. Understand the process: MSCI ESG Ratings are assigned proactively by MSCI analysts — companies do not apply or opt in. Ratings are based entirely on publicly available information, so no formal enrollment is needed.

1. Improve your public disclosures: Since MSCI analysts rely on company filings, sustainability reports, regulatory disclosures, and third-party data, ensure your ESG-related disclosures are comprehensive, accurate, and up to date. Align reporting with frameworks like GRI, SASB, or TCFD.

1. Identify your material ESG key issues: MSCI evaluates companies on industry-specific ESG key issues tied to your GICS sub-industry. Review MSCI's published methodology to understand which environmental, social, and governance factors are considered material for your sector.

1. Engage with MSCI's company portal: MSCI offers a company engagement process through its ESG Ratings Corporate Access portal. Register to view your current rating, the underlying data used, and any flagged data points.

1. Participate in the data verification process: Once you have access, review the data MSCI has collected about your company. Submit factual corrections or additional evidence to address inaccuracies before your rating is finalized or updated.

1. Monitor your rating regularly: Ratings are reviewed annually and can be updated throughout the year based on new disclosures, controversies, or regulatory filings. Set up alerts and monitor your score relative to industry peers.

1. Use the rating strategically: Share your MSCI ESG Rating with investor relations stakeholders, integrate it into sustainability reporting, and use gap analysis from the rating to prioritize ESG improvement initiatives that matter most to institutional investors.

MSCI ESG Ratings evaluate companies across three pillars — Environment, Social, and Governance — but the specific key issues assessed are tailored to each GICS sub-industry based on their financial materiality. Rather than applying a one-size-fits-all framework, MSCI identifies the 3–10 ESG key issues most relevant to each industry and weights them accordingly.

Environmental key issues may include carbon emissions, energy efficiency, water stress, biodiversity impact, toxic emissions and waste, packaging material and waste, and electronic waste — with higher weights assigned to industries where these risks are most financially significant (e.g., carbon emissions for utilities and energy companies).

Social key issues may include labor management, health and safety, supply chain labor standards, product safety and quality, chemical safety, privacy and data security, access to finance, and community relations. For example, data security is heavily weighted for technology and financial services firms, while supply chain labor standards are prioritized for consumer goods companies.

Governance key issues typically include corporate governance (board structure, executive pay, ownership), business ethics (anti-corruption, fraud), and financial system instability for relevant sectors.

Each company receives a score on two dimensions for every key issue: exposure (how much the company is structurally exposed to the risk) and management (how well the company manages or mitigates that risk). These scores are aggregated into a weighted industry-adjusted score, which is then mapped to a letter rating from AAA (leader) to CCC (laggard). Ratings are industry-relative, meaning a company is compared only to peers within its GICS sub-industry, not across all sectors.

MSCI ESG Ratings are widely regarded as the most influential ESG rating system in global capital markets. As of the mid-2020s, MSCI rates over 8,500 companies and more than 680,000 equity and fixed income securities, making it the broadest coverage of any ESG rating provider. The ratings are embedded in trillions of dollars of assets under management through MSCI's ESG indices (such as the MSCI ESG Leaders and MSCI ESG Universal series), which are used as benchmarks by major pension funds, sovereign wealth funds, and ETF providers globally.

The MSCI ESG Rating has become a de facto standard for institutional ESG integration, particularly in North America and Europe. BlackRock, Vanguard, State Street, and most large asset managers reference MSCI ESG data in their investment processes or stewardship reporting. The rating's influence on index inclusion — and therefore passive capital flows — gives it outsized importance for publicly listed companies. A rating upgrade or downgrade can affect a company's inclusion in ESG-screened funds and indices, with real capital market consequences.

However, the ESG ratings market has faced growing scrutiny. Academic research and regulatory bodies (including the EU and SEC) have raised concerns about inconsistency across rating providers — studies show low correlation between MSCI, Sustainalytics, and S&P Global ESG scores for the same companies. MSCI has responded by publishing detailed methodology documentation and offering company engagement tools. The EU's proposed ESG Rating Regulation (expected to take effect around 2026) will require greater transparency and potential oversight of rating providers like MSCI, which may reshape how ratings are produced and disclosed. Despite these headwinds, MSCI remains the dominant player in the space, with demand continuing to grow as ESG disclosure mandates expand globally.

MSCI's ESG research capabilities trace back to 1999 with the founding of Institutional Shareholder Services (ISS) ESG research, but the more direct lineage of today's MSCI ESG Ratings comes from the 2010 acquisition of RiskMetrics Group, which itself had acquired KLD Research & Analytics — one of the earliest ESG research firms, founded in 1988. KLD's Domini 400 Social Index (launched in 1990) was among the first ESG-screened equity indices in the world. MSCI subsequently acquired Innovest Strategic Value Advisors and IRRC Institute assets, consolidating a rich history of ESG research under one platform.

MSCI formally launched its unified ESG Ratings methodology under the MSCI brand in 2013, standardizing the AAA-to-CCC letter scale and industry-relative scoring approach across its global coverage universe. Since then, the program has expanded significantly: coverage grew from roughly 2,000 companies to over 8,500 by the early 2020s, and MSCI extended ratings to fixed income issuers, sovereign entities, and real estate investment trusts. Major methodology updates have been published periodically, with MSCI increasing transparency through public methodology documents and launching the ESG Ratings Corporate Access portal to allow companies to review and engage with their ratings data. The ratings now underpin hundreds of ESG indices and are referenced in regulatory filings and stewardship reports by the world's largest asset managers.