Morningstar Sustainalytics' 10 for 2023 report provides data and analysis on investor exposure to emerging technologies within equity investment strategies.
It focuses on sustainability issues linked to nascent technologies that the global ESG research, ratings, and analytics firm identified as having long-term growth potential, including autonomous shipping, air taxis, electric vehicles, gene therapies, artificial intelligence in IT operations, and small modular reactors.
The report found that while emerging technologies may have the potential to improve aspects of society and the environment, they can also present risks to human health, ecosystems, and companies involved in these spaces.
It also details the key drivers of demand for these technologies and outlines case studies that show how publicly traded companies in these spaces are working to address risks related to several Material ESG Issues (MEIs), including carbon emissions, human capital, and data privacy and security.
The report also identifies unique product governance considerations for investors to integrate into their portfolio and engagement strategies.
"Investors can assess and engage with companies on this and other MEIs to gauge the preparedness of firms to take on critical sustainability challenges," said Morningstar Sustainalytics in its submission.
One Sustainable Investment Awards judge praised Morningstar Sustainalytics' research for going beyond "the normal challenges we all already look at".