ESG & Investing
Over 30,000 Funds to Get Their ESG Ratings Downgraded at MSCI
- Swap-based ETFs will remain eligible for ESG ratings: MSCI
- Overhaul follows widespread criticism of ESG ratings industry
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Some 31,000 funds are about to have their ESG scores lowered at MSCI Inc., as the firm’s ratings unit works through a major overhaul of its methodology in response to feedback from market participants.
Clients had voiced concerns about “an upward drift in ratings across the fund universe,” which is now being addressed, according to MSCI ESG Research. The changes mean that only 0.2% of funds will have a AAA rating in the future, compared with roughly 20% now, according to MSCI estimates.