Morningstar Sustainalytics and Morningstar Indexes Align to Strengthen Morningstar's ESG Offering

Two of Morningstar's fastest-growing product areas will together accelerate the company's ESG data, indexes, ratings, and research expansion

CHICAGO, June 13, 2023  /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment insights, today announced that it will align the Morningstar Sustainalytics and Morningstar Indexes product areas under Morningstar Indexes President Ron Bundy. The move emphasizes Morningstar's ESG market leadership position and enhances its ability to comprehensively meet the evolving needs of investors.

Morningstar provides a full suite of traditional and ESG market data and indexes, as well as ESG ratings and research, across multiple asset classes globally. The new structure will more tightly connect the leading index capabilities of Morningstar Indexes with the respected ESG data, ratings, and research of Morningstar Sustainalytics. Over time, the result will be a more comprehensive suite of ESG and broader index solutions for clients under a single umbrella. 

"Morningstar's independent data and research drive our product innovation. Morningstar Indexes and Morningstar Sustainalytics are two of the clearest examples of putting our IP to work for investors. Investors are demanding deeper levels of consideration for ESG risk or sustainable impact in their portfolios, and bringing our indexing capabilities closer to our ESG research and solutions will meet that need," said Kunal Kapoor, CEO of Morningstar.  

The union builds on Morningstar's investment in ESG capabilities since fully acquiring leading ESG research and ratings firm Sustainalytics in 2020. Morningstar Sustainalytics and Morningstar Indexes delivered 30.5% and 35.5% growth in revenue, respectively, in 2022, and are among Morningstar's fastest-growing product areas.

Since the acquisition of Sustainalytics, Morningstar has grown its ESG data, ratings, and indexes, including:

• Introduced new climate analytics and the company-level Low-Carbon Transition Rating.
• Debuted a number of regulatory and compliance solutions, including an EU Taxonomy Solution that provides insights into the environmentally sustainable activities of companies based on the EU Taxonomy framework, and Morningstar EU Climate Indexes to enable investors to implement their view on climate risk mitigation while meeting EU regulatory requirements.
• Expanded coverage of the Morningstar Sustainability Rating for funds by embedding Country Risk Ratings.
• Added ESG data and analytics across Morningstar's flagship platforms, including introducing the ESG Risk Rating Assessment for companies to Morningstar.com, alongside the Morningstar Sustainability Rating for funds and ESG Commitment Level for asset managers.
• Created the Investable World platform to help investors of all types navigate the spectrum of sustainable investing approaches by using conventional and ESG analytics in concert.

Bundy, an index industry pioneer, joined Morningstar in 2019 and over the past four years has led accelerated growth for Morningstar Indexes, which Burton-Taylor International Consulting named the fastest-growing global index provider for the past two years. Morningstar Indexes, linked to $167.8 billion in assets as of March 31, 2023, has expanded its global footprint beyond North America into Europe and Asia in recent years. European-based Moorgate Benchmarks joined Morningstar Indexes in 2021, and Morningstar Indexes has also grown its ESG initiatives, notably with the recent $3.7 billion extension of its gender diversity index mandate with the Government Pension Investment Fund (GPIF) of Japan, the largest global asset owner.

"We believe this alignment will pay dividends for investors and for Morningstar," Bundy said. "Morningstar Indexes and Morningstar Sustainalytics operate in similar markets, serve a similar set of clients, and have grown our collaboration substantially in recent years. As separate teams, we have successfully joined forces in recent years to introduce a range of ESG product and service offerings and have collaborated on go-to-market strategies. As a united team, we will bring investors a more holistic set of ESG products and services in an even faster and more focused way."

Over the coming months, Bundy will lead an integrated team charged with building an operational plan to tightly connect Morningstar Sustainalytics and Morningstar Indexes capabilities and integrate appropriate areas. Morningstar plans to continue to provide visibility to investors on the performance of these two product areas.

About Morningstar Sustainalytics
Morningstar Sustainalytics is a leading ESG data, research, and ratings firm that supports investors around the world with the development and implementation of responsible investment strategies. For more than 30 years, the firm has been at the forefront of developing high-quality, innovative solutions to meet the evolving needs of global investors. Today, Morningstar Sustainalytics works with hundreds of the world's leading asset managers and pension funds who incorporate ESG information and assessments into their investment processes. The firm also works with hundreds of companies and their financial intermediaries to help them consider material sustainability factors in policies, practices, and capital projects. Morningstar Sustainalytics has analysts around the world with varied multidisciplinary expertise across more than 40 industry groups. For more information, visit www.sustainalytics.com.

About Morningstar Indexes
As the fastest-growing global index provider for the last two years according to Burton-Taylor International Consulting, Morningstar Indexes was built to keep up with the evolving needs of investors—and to be a leading-edge advocate for them. Morningstar's rich heritage as a transparent, investor-focused leader in data and research uniquely equips Morningstar Indexes to support individuals, institutions, wealth managers and advisors in navigating investment opportunities across all major asset classes, styles, and strategies. From assessing risk and return with traditional benchmarks to helping investors effectively incorporate ESG objectives into their investment process, our range of index solutions spans an investment landscape as diverse as investors themselves. We help investors answer today's increasingly complex questions so that they can more easily reach tomorrow's goals. Please visit indexes.morningstar.com for more information.

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment insights 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 $249 billion in assets under advisement and management as of March 31, 2023. The Company operates through wholly- or majority-owned subsidiaries in 32 countries. For more information, visit www.morningstar.com/company. Follow Morningstar on Twitter @MorningstarInc.

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements as that term is used in the Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations about future events or future financial performance. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, and often contain words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," or "continue."

These statements involve known and unknown risks and uncertainties that may cause the events we discuss not to occur or to differ significantly from what we expect. In particular, we may not achieve the expected synergies from this leadership transition, the reorganization may distract management from other strategic initiatives, and one-time costs could impact our financial results.

A more complete description of these risks and uncertainties can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K. If any of these risks and uncertainties materialize, our actual future results and other future events may vary significantly from what we expect. We do not undertake to update our forward-looking statements as a result of new information or future events.

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SOURCE Morningstar, Inc.