Morningstar ESG Risk Rating for Funds

The Morningstar ESG Risk Rating for funds rates the overall ESG risk in a fund portfolio relative to its peer group. It can be useful for investors who seek to understand and manage the ESG implications of their investments.

For each fund that is eligible for a Morningstar ESG Risk Rating, the rating is expressed as 1 to 5 “globes,” whereby a higher number of globes indicates that the portfolio has lower ESG risk. Notably, the number of globes a fund receives is determined relative to other funds in the same Morningstar Global Category. This means that a fund could have more ESG risk than another fund yet still receive a better rating if those funds are in different Morningstar Global Categories, with their own unique qualification of what is a relatively low or relatively high amount of ESG risk.