Industry Updates

Morningstar acquires ESG data provider Sustainalytics

George Geddes

a man shaking hands with another man

Research and data provider Morningstar has completed the acquisition of Sustainalytics, an environmental, social and governance (ESG) ratings provider.

Morningstar, which already held a 40% stake in Sustainalytics from its 2017 acquisition, will purchase the remaining 60%.

The two companies first partnered in March 2016 for the launch of Morningstar’s Sustainability Rating services for global mutual funds and ETFs.

Sustainalytics offers ESG data on 40,000 companies worldwide and ratings on 20,000 companies. The firm's data has been used for ESG products launched by State Street Global Advisors and Qontigo.

The acquisition includes an initial cash payment worth €55m with additional cash payments in 2021 and 2022 depending on Sustainalytics revenues for the respective years.

Morningstar has valued Sustainalytics to be €170m.

The transaction is subject to customary closing conditions and is expected to complete in Q3 2020.

Morningstar: Passive ESG fixed income ‘ripe for rapid expansion’

Kunal Kapoor, chief executive officer at Morningstar, said: "Modern investors in public and private markets are demanding ESG data, research, ratings, and solutions in order to make informed, meaningful investing decisions.

"By coming together, Morningstar and Sustainalytics will fast track our ability to put independent, sustainable investing analytics at every level – from a single security through to a portfolio view – in the hands of all investors."

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