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What are Material ESG Issues?

In the ever-evolving landscape of today's market, deciphering the array of risks linked to company ESG issues is paramount. Sustainalytics' ESG Risk Ratings are anchored in the critical exploration of material ESG issues, serving as the cornerstone of our comprehensive analysis.


Supporting our core material ESG issues are over 250 ESG indicators, providing investors with insights into both the extent of companies' exposure to specific challenges and the effectiveness of their management strategies for these issues.


Explore All Material ESG Issues


ESG Risk Ratings meticulously assesses significant Environmental, Social, and Governance (ESG) risks, offering extensive coverage of large and mid-cap companies across equity and fixed income strategies. Morningstar Sustainalytics research serves a wide array of purposes for asset managers, asset owners and banks.


Focuses on the frameworks, systems, processes and practices that determine how a company is operated and controlled.

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Corporate Governance

Focuses on the broader societal responsibility of companies beyond generating profits for their shareholders.

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Stakeholder Governance

Focuses on the management of access to essential products or services such as healthcare services and products to disadvantaged communities or groups.

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Access to Basic Services

Focuses on the management of ethical issues relevant to most or all sectors, such as taxation, accounting, anti-competitive practices, and intellectual property.

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Business Ethics

Explores how companies engage with local communities through involvement, community development, or actions to reduce negative impacts on those communities.

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Community Relations

Focuses on risks to personal information and/or cybersecurity and how companies manage these risks.

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Data Privacy and Cybersecurity

Focuses on the management of emissions and releases from a company’s own operations to air, water and land, excluding GHG emissions.

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Emissions, Effluents and Waste

Focuses on managing risks from a company’s operational energy use and GHG emissions (scope 1 and 2), including certain parts of Scope 3 emissions.

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Carbon – Own Operations

Examines a company's management of the energy efficiency and/or GHG emissions of its services and products during the use phase.

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Carbon – Products and Services

Focuses on the management of environmental and social impacts of products and services, including characteristics of input materials and impacts during use, disposal and recycling.

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E&S Impact of Products and Services

Focuses on how companies manage and respect fundamental human rights within their own operations.

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Human Rights

Focuses on a company’s management of fundamental human rights issues occurring in its supply chain.

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Human Rights – Supply Chain

Focuses on the management of risks from skilled labour shortages and labour relations, including non-discrimination, working hours and minimum wage compliance.

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Human Capital

Examines how companies manage their impact on land, ecosystems and wildlife, covering topics like land conversion, rehabilitation and forest management.

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Land Use and Biodiversity

Focuses on how companies manage the impact of their suppliers' operations on land, ecosystems and wildlife.

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Land Use and Biodiversity – Supply Chain

Focuses on the management of workplace hazards for a company's employees and on-site contractors.

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Occupational Health and Safety

Examines all ESG activities by financial institutions aimed at addressing financial risk or seizing business opportunities.

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ESG Integration – Financials

Examines how companies manage client responsibilities, emphasizing quality management, marketing practices, fair billing and post-sales obligations.

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Product Governance

Focuses on the financial stability and the management of related risks in the financial services industry, with emphasis on compliance with capital requirements.

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Resilience

Focuses on how a company uses water in its production processes and how well it manages related risks.

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Water Use – Own Operations

Focuses on how a company manages risks related to water stress within its supply chain.

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Water Use – Supply Chain

Examines how efficiently a company uses critical raw materials (excluding energy, petroleum-based products, and water) in production, focusing on risk management.

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Raw Material Use