ESG Data Guide 2023

Morningstar Sustainalytics - Low Carbon Transition Ratings

Data category

  • Environmental data
  • Ratings
  • Research data

The data offers solutions for:

  • Environmental impact analysis and insight
  • Investment decisions and portfolio insight
  • Reporting: TCFD
  • Temperature alignment
  • Transition plan assessments

Who are the data users?

  • Investors
  • Financial institutions

Brief description of the data offering

Morningstar Sustainalytics’ Low Carbon Transition Ratings is a science-based assessment tool developed to help investors understand how prepared companies are to meet their net zero commitments.  Expressed as an Implied Temperature Rise, the ratings offer investors a contextual signal that shows a company’s exposure to transition risks based on its emissions and management performance. The ratings are based on the outcomes of scenario analysis from the PRI-commissioned Inevitable Policy Response and include more than 85 management indicators weighted by GHG emissions and grouped by TCFD themes.  The assessment analyzes a company’s current alignment to a net-zero pathway, leveraging the PRI-Commissioned IPR 1.5 degrees Celsius required policy scenario, which demonstrates strong policies and actions needed to keep global warming below 1.5 degrees Celsius beyond current stated policies.

Where and how do you source your data?

The data source varies depending on the datapoint. For emissions for instance, we go with reported emissions unless these aren't available, in which case we go with our internal estimation model. For the data used in the management indicators we use publicly available data, or data sourced from direct questionnaires where appropriate and possible. This is all done via a mixture of AI enabled data mining supplemented strongly by human research and quality control. 

The LCTR Research team consists of over 80 research analysts, 10 specialists globally with rich experience in climate-related research methodologies, policies and regulations. It also includes over 10 individuals focused on quality assurance and continuous improvement leveraging multiple tools and technology-based solutions to ensure data integrity and consistency.

What is the cost for your data offering?

Our pricing is based on scope of that data needed and each client’s specific use case. 

What are the key attributes that differentiates the data you offer?

Our low carbon transition ratings are differentiated by:

  • Holistic integration of management preparedness:
    • Looking beyond historical emissions and stated net zero commitments, by providing a deep assessment of company actions, including implemented policies, governance systems and investment plans.
    • 85+ general and subindustry-specific management indicators are weighted by relevance to a company’s GHG emissions scope distribution and researched by a dedicated team of over 80 human analysts supported by AI data collection technologies.
  • Dedicated TCFD module shows the scope and quality of an issuer’s TCFD disclosure: Bonus module leverages the same rich management indicators to assess the completeness and quality of an issuer’s TCFD disclosure by thematic area.
  • Transparent methodology and clear indicator guidance: enables investors to validate and customize all data points. All indicator evaluation criteria and model calculations are made available to clients providing the ability to generate unique insights.
  • Sophisticated and science-based downscaling and reconciling: of the 1.5 Required Policy Scenario from the UN PRI commissioned investible policy response resulting in a company-specific net-zero budget that takes into account the location of the company’s operations and business activities.

 

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Morningstar Sustainalytics’ Low Carbon Transition Ratings offer investors a contextual signal of a company’s exposure to transition risks based on its emissions and management performance and analyses a company’s current alignment to a net-zero pathway.

Contacts

inquiries.Americas@sustainalytics.com

Contacts

inquiries.APAC@sustainalytics.com

Contacts

inquiries.EMEA@sustainalytics.com

Contacts

inquiries.Japan@sustainalytics.com