Who are the major ESG rating agencies?

Environmental, Social, and Governance (ESG) ratings have become an essential tool for investors, companies, and policymakers to evaluate a company's sustainability and ethical practices. These ratings assess corporate performance across ESG factors, offering insights into how businesses manage risks and opportunities in areas like environmental impact, human rights, diversity, and corporate governance. Here’s a look at the top 3 ESG rating agencies on the market. We also discuss how listed companies should consider communicating about their ratings and provide some of our favorite examples. 

Want to work with Nossa Data to improve your ESG Ratings? Get in touch now to learn how we work with clients. 

1. MSCI ESG Research

MSCI is one of the leading providers of ESG ratings globally. It evaluates companies based on their exposure to ESG risks and their ability to manage them. MSCI assigns ESG ratings on a scale from AAA (best) to CCC (worst) and covers over 14,000 entities, including companies and government issuers. MSCI’s methodology emphasizes material ESG factors, allowing investors to integrate these considerations into their decision-making processes. Its robust data and analytics are widely used by institutional investors.

What are the benefits of an MSCI ESG ratings? One key goal for companies is to become placed in an MSCI index. Below is a helpful image of showing the ESG characteristics of a company in an MSCI index. (As of January 2025). 

2. Sustainalytics

Sustainalytics, a Morningstar company, is another prominent ESG rating agency. It evaluates companies' exposure to ESG risks and assigns scores based on their preparedness, management systems, and controversies. Sustainalytics offers a unique Risk Ratings framework, which categorizes companies into five levels of risk: negligible, low, medium, high, and severe. The firm covers thousands of companies worldwide and is a trusted resource for ESG-focused investors.

Below you can see an example of a risk rating for 1-800-FLOWERS. As a reminder, lower scores are better for Sustainalytics. The best bucket of scores a company can fall into is “Negligible” between 0-10.

3. ISS ESG

Institutional Shareholder Services (ISS) ESG offers a wide range of solutions, including ESG ratings, climate analytics, and impact assessments. It provides granular data and insights to help investors integrate ESG factors into their strategies. ISS ESG’s ratings are based on detailed criteria, including a company’s performance relative to industry peers and adherence to international standards.

To understand what creates an ISS rating score, here is an image that goes into the underlying aspects of their ESG ratings. 

ESG Other Ratings

In this article we focus on what we view as the big three in terms of ESG Ratings. The 3 listed also tend to have importance across all listed companies regardless of geography and sector. However, there are many other ESG ratings your company could care. Some are industry specific, others topic specific. Nossa Data has extensive experience with a longer list of ratings and we are happy to help you learn more about other rating agencies as well. Some additional rating agencies to consider: WDI, S&P Global ESG Scores, Moody’s ESG Solutions, CDP, Ecovadis, LSEG Refinitiv, FTSE 4 Good, RDR, GRESB, WBA. 

Get in touch now to learn about a wider set of ESG rating agencies and how we work with clients.