ESG Data Guide 2024

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?

  • Financial institutions
  • Investors

Brief description of the data offering

Morningstar Sustainalytics’ Low Carbon Transition Ratings provide investors with a top-level implied temperature rise and value-at-risk, assessing companies’ current alignment to a net-zero pathway. The ratings are supported by robust research into company actions with over 85 management indicators and a transparent dataset, including annual expected emissions trajectories for different climate change scenarios. Leveraging our Low Carbon Transition Ratings, investors can respond to regulatory initiatives, implement net-zero strategies, fulfil client net-zero mandates, conduct scenario analysis, and obtain transparency into company actions by integrating climate research into their investment decision-making processes.

Where and how do you source your data?

The data source varies depending on the data point. For emissions, for instance, we use reported emissions unless these aren't available, in which case we use 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 and 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 differentiate 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.