Sustainalytics’ comprehensive framework measures the degree to which a company’s projected greenhouse gas (GHG) emissions differ from a net-zero pathway between now and the year 2050. The ratings leverage a twodimensional framework that measures an issuer's exposure from its expected emissions, while also accounting for management actions. They assess the company's progress toward its stated netzero commitments by evaluating the quality and ambition of its GHG reduction targets, as well as any demonstrated short-term investment plans, policies and programs such as Climate Transition Resilience Program, Product Decarbonization Strategy and a GHG Emissions Reduction Policy - Supply Chain.

• Holistic Integration of Management Preparedness: With more than 85 general and sub-industry pecific management indicators – weighted by a company’s distribution of GHG emissions across Scopes 1, 2, 3 upstream, and 3 downstream – investors gain transparency into management preparedness and can integrate granular climate insights into their company assessments and valuation models
• Dedicated Module to Assess Issuer Reporting with TCFD: A TCFD module is included in the rating to assess and track the comprehensiveness of issuer reporting and translate our assessment of issuers’ managerial preparedness across the four thematic areas recommended by the TCFD: governance, strategy, risk management, and metrics and targets
• Access to Sustainalytics’ Transparent Methodology and Granular Data: A transparent methodology, multiple levels of data and clear indicator guidance underpin our ratings
• It allows for validation and customization of the weighted data points to generate unique insights that align to investors’ objectives
• Developed by an Industry-Leading Team: Sustainalytics’ solution has been developed by the dedicated Climate Solutions business unit of over 100 climate experts in partnership with our industry-leading ESG Risk Ratings team
• Analyze Expected Issuer Emissions Against the UN PRI 1.5°C Policy Scenario: Low Carbon Transition Ratings are driven by a bottom-up scenario analysis, evaluating companies’ emission trajectories against expected regional policy and technology pathways required to meet the Paris Agreement and net-zero ambitions by the year 2050, additional scenarios for further analysis are in development
• 5,000+ Companies Covered Sustainalytics: Low Carbon Transition Ratings span more than 5,000 companies and encompass most major global indices
• Future expansion of the company database will align with the coverage of our ESG Risk Ratings (12,000+)

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Morningstar Sustainalytics is a leading independent ESG and corporate governance research, ratings and analytics firm that supports investors around the world with the development and implementation of responsible investment strategies. For more than 30 years, the firm has been at the forefront of developing high-quality, innovative solutions to meet the evolving needs of global investors. Today, Sustainalytics works with hundreds of the world’s leading asset managers and pension funds who incorporate ESG and corporate governance information and assessments into their investment processes. Sustainalytics also works with hundreds of companies and their financial intermediaries to help them consider sustainability in policies, practices and capital projects.

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