MSCI ESG

MSCI ESG provides industry-relative ESG ratings and climate risk data for asset managers and institutional investors building index-linked mandates.

Reviewed by 7wData
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MSCI ESG provides industry-relative ESG ratings and climate risk data for asset managers and institutional investors building index-linked mandates. The platform assigns letter ratings (AAA to CCC) to over 17,000 issuers across 999,000 securities worldwide, based on how well companies manage financially relevant sustainability risks compared to peers. The methodology uses approximately 4,000 raw data points per company, combining corporate disclosures with alternative data sources to identify material ESG risks.

Used by 98 of the world's top 100 asset managers, MSCI ESG is heavily embedded in benchmark construction and portfolio analysis workflows. Clients integrate ratings into custom index design, screen universes for sustainability mandates, and track portfolio exposure to material ESG risk. Historical research shows a correlation between higher MSCI ratings and lower cost of capital across both equity and debt markets over 17-year periods.

Key strengths include broad coverage of public markets, standardized rules-based methodology across industries, and tight integration with index licensing. MSCI also offers custom ESG indexes, climate-focused benchmarks (including Paris-Aligned Benchmark variants), and an ESG data API providing real-time access to ratings and raw data for programmatic integration.

Criticism centers on methodology opacity—approximately half of rating changes in 2021 were driven by methodology updates rather than company behavior changes. Independent research shows MSCI ratings exhibit negative correlation with Sustainalytics and Asset4 scores, and compressing hundreds of data points into a single letter grade can mask a company's complex risk profile. Data quality remains a structural challenge; like all ESG raters, MSCI relies on company self-disclosure and third-party data with no legal audit requirement.

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How it works

  1. Industry-Relative ESG Ratings

    Assigns AAA-to-CCC letter grades across 999,000+ securities, measuring companies against peers in the same GICS sector for financially material ESG risks.

  2. Custom Index Design

    Build client-designed equity and fixed-income indexes incorporating ESG criteria, exclusionary screens, and climate constraints while maintaining MSCI's standard production infrastructure.

  3. ESG Data API

    REST API providing programmatic access to over 4,000 ESG data points per issuer, climate metrics, and raw data feeds for portfolio analytics and risk systems.

  4. Climate Risk Metrics

    Covers 250,000+ companies with climate scenario analysis, physical and transition risk exposure, and alignment to climate transition frameworks.

  5. Fund-Level ESG Ratings

    Rates mutual funds and ETFs on ESG exposure and management quality, enabling managers to benchmark fund-level sustainability profiles against peers.

  6. Real-Time Data Updates

    Data released as collected with continuous updates, supported by AI-driven processes for faster delivery of investment-relevant insights.

  7. Regulatory Reporting Integration

    Supports compliance with evolving global standards including ISSB, ESMA, SASB, and CSRD for consistent cross-market comparison.

Strengths and trade-offs

Strengths

  • Embedded in 43 of top 50 global asset managers' workflows; de facto standard for index-linked mandates with $16.5+ trillion in tracked assets.
  • Rules-based methodology applied consistently across 17,000+ issuers avoids subjective judgment; enables systematic screening and portfolio construction.
  • Integrates custom index design, climate benchmarks, and API-driven data feeds in one platform, reducing operational friction for large asset managers.

Trade-offs

  • Methodology changes drive ~50% of rating shifts; ratings were unstable in 2021–22 with 31,000 funds expecting downgrades two years after methodology shifts.
  • Low correlation with competing ESG providers (negative with Sustainalytics and Asset4); letter grades compress 4,000+ data points, masking detailed risk nuance.
  • Pricing structure is opaque and requires direct sales contact; no public pricing tiers. Reliance on corporate self-disclosure creates data quality ceiling shared across all ESG raters.

Pricing context

MSCI does not publish transparent pricing tiers on its website. Pricing is customized per client based on content delivered, service type, data coverage, and delivery frequency. Index licensing typically involves recurring fees of 0.02–0.04 percent of assets under management.

For ESG ratings and custom index design, quotes are provided by sales on request, with separate pricing for API access tiers. MSCI's index and analytics licensing generates over $3 billion in annual revenue with 55% operating margins, reflecting recurring, high-margin business. Enterprise ESG data subscriptions are typically negotiated for asset managers and institutional clients at scale.

Getting started with MSCI ESG

  1. Request MSCI ESG access

    Contact MSCI sales through their website or your account representative to request a quote for ESG ratings, custom indexes, or API access. Provide details on your asset size, data coverage needs, and delivery frequency to receive a tailored pricing proposal.

  2. Connect your portfolio data

    Upload your portfolio holdings or index constituents into the MSCI platform via CSV, API, or direct integration. Ensure your data includes security identifiers such as ISINs or SEDOLs to enable accurate ESG rating mapping across the 999,000+ securities covered.

  3. Configure ESG screening criteria

    Set your ESG screening parameters by selecting minimum letter-grade thresholds (e.g., exclude issuers rated CCC or B) and choose industry-relative comparisons based on GICS sectors. Define exclusionary screens for controversial sectors or climate risk exposure limits.

  4. Run portfolio ESG analysis

    Execute an ESG portfolio analysis to view aggregate ratings, exposure to material risks, and climate metrics. Review the distribution of AAA-to-CCC ratings across your holdings and compare your portfolio’s ESG profile against relevant benchmarks.

  5. Schedule automated data updates

    Set up recurring data pulls via the MSCI ESG Data API to receive real-time rating changes and new data points. Configure alerts for rating downgrades or methodology updates that may affect your portfolio, ensuring your analysis stays current.

Frequently Asked Questions

What is MSCI ESG and how does it rate companies?

MSCI ESG provides industry-relative ESG ratings and climate risk data for asset managers. It assigns letter grades from AAA to CCC to over 17,000 issuers based on how well they manage financially relevant sustainability risks compared to peers in the same sector.

How many companies does MSCI ESG cover and what data does it use?

MSCI ESG covers over 17,000 issuers and 999,000 securities globally. Its methodology uses approximately 4,000 raw data points per company, combining corporate disclosures with alternative data sources to identify material ESG risks relevant to investors.

Who uses MSCI ESG ratings and for what purposes?

MSCI ESG is used by 98 of the world's top 100 asset managers. Clients integrate ratings into custom index design, screen universes for sustainability mandates, and track portfolio exposure to material ESG risk for benchmark construction and analysis.

What climate risk metrics does MSCI ESG offer?

MSCI ESG provides climate risk metrics covering over 250,000 companies. These include climate scenario analysis, physical and transition risk exposure, and alignment to climate transition frameworks like Paris-Aligned Benchmarks for institutional investors.

What are the main criticisms of MSCI ESG ratings?

Criticism centers on methodology opacity, with about half of rating changes in 2021 driven by methodology updates rather than company behavior. MSCI ratings also show negative correlation with Sustainalytics and Asset4 scores, and compressing 4,000 data points into a single letter grade can mask risk nuance.

How much does MSCI ESG data cost and how is it accessed?

MSCI does not publish transparent pricing tiers. Pricing is customized per client based on content, service type, and delivery frequency. Index licensing typically involves recurring fees of 0.02–0.04 percent of assets under management, with separate pricing for API access.

Alternatives

How MSCI ESG compares

Direct head-to-head against 3 competitors. Picked by 7wData.

This tool

MSCI ESG

Pricing
MSCI does not publish transparent pricing tiers on its website. Pricing is customized per client based on content delivered, service type, data coverage, and delivery frequency. Index licensing typically involves recurring fees of 0.02–0.04 percent of assets under management. For ESG ratings and custom index design, quotes are provided by sales on request, with separate pricing for API access tiers. MSCI's index and analytics licensing generates over $3 billion in annual revenue with 55% operating margins, reflecting recurring, high-margin business. Enterprise ESG data subscriptions are typically negotiated for asset managers and institutional clients at scale.
Target
MSCI ESG provides industry-relative ESG ratings and climate risk data for asset managers and institutional investors building index-linked mandates.
Strength
Embedded in 43 of top 50 global asset managers' workflows; de facto standard for index-linked mandates with $16.5+ trillion in tracked assets.
Watch for
Methodology changes drive ~50% of rating shifts; ratings were unstable in 2021–22 with 31,000 funds expecting downgrades two years after methodology shifts.

LSEG Data & Analytics

Pricing
Contact sales; no public list pricing.
Target
Asset managers, banks, and insurers needing ESG scores for 16K+ companies.
Deployment
Cloud API or data feed.
Strength
Covers 99% of FTSE All World Index with 240+ standardized metrics.
Watch for
Legacy ESG scores transitioning; new methodology may shift comparability.

FactSet

Pricing
Custom/Contact sales; typically enterprise seat-based or data subscription.
Target
Investment professionals requiring integrated ESG data with financial analytics.
Deployment
Cloud terminal and API.
Strength
Combines ESG data with portfolio analytics and risk models in one platform.
Watch for
Pricing can escalate with add-on data modules and user seats.

Salesforce Data Cloud

Pricing
Flex Credits $500/100k; Profiles $240/1k/yr; Enterprise $420/1k/yr.
Target
Enterprises unifying CRM data for AI and personalization.
Deployment
SaaS multi-tenant cloud.
Strength
Free ingestion of structured Salesforce data reduces cost for existing customers.
Watch for
Consumption-based model can surprise with costs if usage spikes.

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Sources

Reporting on this tool draws on these publicly available sources.

  1. www.msci.com — MSCI ESG Ratings coverage (17,000+ issuers), methodology (rules-based AAA-CCC letter ratings), and data points (4,000 per issuer)
  2. www.msci.com — Client base (3,000+ sustainability clients, 98 of top 100 asset managers), financial correlation evidence (cost of capital), and limitations
  3. www.futuregreenworld.com — Competitive positioning (MSCI vs Sustainalytics vs S&P Global), methodology differences, correlation weaknesses
  4. www.msci.com — Custom index design, equity and fixed-income workflow, ESG integration methodology
  5. www.msci.com — Detailed ESG ratings methodology, GICS-based industry classification, material risk assessment
  6. www.responsible-investor.com — 2026 model updates affecting 37% of issuers, methodology instability pattern
  7. developer.msci.com — MSCI ESG data API, REST architecture, 4,000+ data points per issuer, programmatic access
  8. en.wikipedia.org — MSCI founded 1969, headquartered New York City, global index licensing and data provider