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FT: Morningstar Ethical Rating Could Cost Funds Billions



The FT reported last Sunday that asset managers fear losing billions of dollars as a result of a Morningstar (a leading financial data provider) releasing their environmental, social and governance (ESG) scores for a large proportion of their of 200,000 funds at the end of March. Read the full article here (paywall).

Fiona Reynolds, managing director at the Principles for Responsible Investment, a UN-backed group that promotes responsible investing, told the FT: “For too long, managers have been sidestepping ESG, often claiming that it was not part of their fiduciary duty. The Morningstar ratings mean managers can no longer ignore ESG issues.”
Speaking to Blue & Green, John Fleetwood of 3D Investing, said: “This is excellent.  It shows the power of a rating system to change practice  – to reverse the usual race to the bottom and make it a race to the top.”

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