BST Awards 2025: Best ESG data provider to the buy side—Morningstar Sustainalytics

Overview

For more than 30 years, Morningstar Sustainalytics has put sustainable investing considerations into practice with a range of solutions that support the entire buy-side investment value chain from decision-making to monitoring and reporting. The Amsterdam-based subsidiary of investment research and data specialist Moningstar, which acquired the business in July 2020, focuses on helping its clients spend less time grappling with ESG and climate-related data and ancillary content and more time making the most of it. The firm offers its clients a unique global perspective that allows them to navigate domestic and regional regulations with confidence, while its solutions help drive action, demonstrating the materiality/significance of ESG and climate-driven investments.

The solution  

According to Morningstar’s 2025 Voice of the Asset Owner Survey, asset owners find ESG issues/considerations increasingly material, with climate concerns being the most tangible factor. To address this need, the firm provides a standalone dataset designed to help investors implement the Institutional Investors Group on Climate Change Net Zero Investment Framework (NZIF) 2.0, a widely adopted roadmap for setting portfolio-level objectives and asset-level targets to support climate transition plans and strategies. This provides comprehensive data aligned with all seven NZIF 2.0 criteria.

Secret sauce  

Morningstar Sustainalytics solutions cover the entire investment value chain across asset classes, allowing the firm to serve investors worldwide. It offers an ESG Stewardship solution designed to support institutional investors in integrating sustainability considerations into their portfolios and includes engagement services and proxy voting tools, underpinned by robust research and data. As a subsidiary of Morningstar, it benefits from a network effect of research across securities, funds and portfolio-level data, while its data, solutions, SMEs and customer service are designed specifically to help investors integrate sustainability with ease.

Recent milestones

Morningstar Sustainalytics recently:

• Enhanced its second-party opinion framework on Use of Proceeds (UoP) bonds, going beyond labels and delivering clear, comparable insights into sustainability contributions
• Updated its Country Risk Rating product, providing a forward-looking perspective, tracking risks over time
• Added new, emerging Material ESG issues―thematic topics that can impact a firm’s value―to its ESG Risk Ratings, reflecting market shifts and client needs. It also streamlined its corporate governance signal, reducing unnecessary complexity.

Future objectives

Morningstar Sustainalytics aims to:

• Update its dual event scoring system for controversies research, incorporating separate impact and risk signals analyzing severity, allowing firms to monitor and act on involvement with double materiality (impact materiality and financial materiality)
• Enhance its product involvement coverage of energy-based indicators; add a new involvement area for metallurgical coal; and improve reporting on companies across the fossil fuel industry.
• Expand opinion services to the asset level, verifying alignment with global standards.

Why they won

ESG-related news stories might be on the wane in terms of volume in both the financial and mainstream press, but that should not be seen as a barometer gauging investors’ appetites for ESG-driven/related investments. Far from it, in fact: ESG and sustainable investment assets under management have continued to grow appreciably over the past decade, underlining just how important the industry is to institutional and private investors alike.

Morningstar Sustainalytics wins its first ever award across all of WatersTechnology’s seven awards programs, thanks to its ability to integrate sustainability insights across the investment value chain. The firm’s various data solutions help buy-side firms move seamlessly from ESG data collection to actionable investment decisions, while its dedicated dataset aligned with the NZIF 2.0 enables investors to set and measure climate transition targets with confidence, meeting the industry’s growing demand for tangible, portfolio-level climate alignment. 

By combining global ESG data coverage, forward-looking analytics and regulatory intelligence, Sustainalytics helps clients focus on ESG-driven impact rather than day-to-day data management challenges. The firm’s recent innovations, including enhanced second-party opinions, expanded material ESG issue coverage and improved governance metrics, underscore its leadership in data quality and relevance in what is now an intensely competitive sector. Supported by Morningstar’s vast research infrastructure, Sustainalytics sets the benchmark for integrating ESG and climate data into mainstream investment workflows and will most likely be the vendor to beat in this category in 12 months’ time.

Previous winners of this perennially competitive category include JP Morgan (2024), FactSet (2022 and 2023) and Moody’s ESG Solutions (2021).