Financial services and ratings provider MSCI is reportedly looking to downgrade the ESG ratings of thousands of funds and strip hundreds more of their ESG status altogether, according to unpublished research by BlackRock’s ETF provider iShares.
First reported by the Financial Times, the number of European ETFs with a triple-A ESG rating from MSCI will fall from 1,120 to just 54, and the amount of ETFs with no rating will rise significantly from 24 to 462.
Under the changes being planned by MSCI, all “synthetic” ETFs, those which use investment techniques such as futures contracts, will lose their ESG rating, even if the “physical” ETF being tracked is still rated highly.
The changes are anticipated to take place at the end of April. MSCI has been contacted for comment.
Last month MSCI launched Corporate Sustainability Insights, a tool designed to increase corporate understanding of the ESG and climate challenges and opportunities facing companies.
