MSCI Data & Ratings Methodology, Uses & Ways To Improve
A clear guide to MSCI ESG ratings, methodology, MSCI ESG data, how ratings are formed, the India Index, and actions companies can prioritise for businesses and investors.
Achieve Your Desired MSCI Rating
MSCI is a leading provider of ESG (Environmental, Social, and Governance) ratings and analysis, helping investors assess a company's resilience to long-term ESG risks. MSCI evaluates businesses across key ESG factors like exposure to industry risks, the potential impact on long-term financial performance, and how well those risks are managed.
Ratings range from AAA to CCC, providing investors, analysts, and stakeholders with a clear and comparable view of a company's sustainability standing. A strong MSCI rating signals transparency, responsible governance, and commitment to sustainable growth — directly influencing investment decisions, procurement partnerships, and access to global capital markets.
1000+
Data points collected per company
35
ESG key issues evaluated
7
Rating levels (AAA → CCC)
3
Time horizons weighted
What is MSCI?
MSCI is a globally recognised ESG rating provider that evaluates how well companies manage financially relevant and industry-specific sustainability risks and opportunities. It uses a rules-based methodology and assigns ratings on an AAA to CCC scale based on performance relative to industry peers.
MSCI is primarily used by investors for capital allocation, while CDP focuses on environmental disclosure through questionnaires on climate, water, and forests. EcoVadis, on the other hand, evaluates supply chain sustainability across areas like labour practices, ethics, and environmental impact.
This makes MSCI ESG Ratings highly influential in investment decisions made by pension funds, sovereign wealth funds, endowments, and asset managers worldwide — directly impacting a company's credibility and global standing.
- ESG Index Inclusion: MSCI ratings support ESG-focused portfolios and indices, increasing visibility among global investors.
- Investment Decision Influence and Cost of Capital: Investors use MSCI ratings to assess sustainability risks and returns, while higher-rated companies are more likely to attract capital at favourable terms.
- Competitive Benchmarking and Global Market Positioning: MSCI compares companies with industry peers, helping identify leaders while strengthening credibility across international markets and stakeholder networks.
MSCI ESG Rating Scale
MSCI rates companies on a seven-level scale from AAA to CCC, and individual issue scores range from 0 to 10. These scales are then categorised into a letter grade.
| Rating | Category | Score Range | What it Means |
|---|---|---|---|
| AAA | Leader | 8.571 – 10.000 | Exceptional ESG performance. Organisations lead the industry in managing material sustainability risks and opportunities. |
| AA | 7.143 – 8.570 | Effectively manages most ESG risks. Demonstrates strong and consistent sustainability practices. | |
| A | Average | 5.714 – 7.142 | Maintains reasonable ESG standards relative to peers but with identifiable areas for improvement. |
| BBB | 4.286 – 5.713 | Meets basic ESG requirements but shows inconsistency in implementation across sustainability areas. | |
| BB | 2.857 – 4.285 | Struggles to manage ESG challenges consistently. Faces several compliance and performance gaps. | |
| B | Laggard | 1.429 – 2.856 | Performs poorly on ESG metrics. Remains highly exposed to sustainability-related risks. |
| CCC | 0.000 – 1.428 | Fails to manage ESG risks effectively. Highly vulnerable to controversies and regulatory scrutiny. |
Leaders
AAA / AA
Organisations that actively manage material sustainability risks and demonstrate above-peer ESG performance.
Average
A / BBB / BB
Mixed or inconsistent track records relative to industry peers.
Laggards
B / CCC
High ESG risk exposure and insufficient management practices to address them.
Key ESG Factors in MSCI Ratings
MSCI evaluates companies across industry-specific ESG factors, considering both risk exposure and management quality.
Environmental
- Climate Risk: Greenhouse gas emissions intensity, reduction targets, and exposure to climate risks like extreme weather and policy shifts.
- Product Carbon Footprint: Lifecycle carbon emissions across the value chain.
Social
- Supply Chain Labour Standards: Forced labour, child labour, and working conditions across the supply chain.
- Human Capital: Labour relations, talent management, fair wage practices, and career development.
- Product Safety and Quality: Product safety risks, quality systems, and chemical safety.
- Data Privacy and Security: User data protection, cybersecurity, and compliance with privacy rules.
Governance
- Corporate Governance: Board structure, composition, accountability measures, and influence within decision-making.
- Executive Compensation: Alignment between leadership pay, long-term performance, and ESG targets.
- Corporate Behaviour: Business ethics, anti-corruption policies, tax transparency, and integrity in public affairs.
How MSCI ESG Scores Are Calculated
01
Data Collection
MSCI collects over 1,000 data points from distinct sources: corporate filings, financial statements, press releases, and third-party sources such as media, NGOs, and regulators.
02
Key Issue Scoring
Data is mapped across 35 ESG key issues. Each is scored from 0 to 10 based on exposure (risk vulnerability) and management (response effectiveness).
03
Weighting by Impact & Time Horizon
Scores are weighted by financial impact and the time when it is likely to occur — short-term (under 2 years), medium-term, and long-term (5+ years).
04
Industry-Relative Scoring
Scores are aggregated and benchmarked against industry competitors to ensure comparison with similar risk profiles.
05
Final Letter Rating
Final scores are converted into ratings from AAA to CCC, classifying companies as Leaders, Average, or Laggards.
Strengthening Your ESG Credibility
By addressing key MSCI rating factors, Oren enables companies to build investor confidence, mitigate risks, and enhance their competitive advantage.
Enhanced ESG Scores
Improve your MSCI ESG rating by addressing material issues and showcasing strong ESG practices aligned with MSCI certification expectations.
Investor Trust
Demonstrate clear and strong ESG performance, backed by a trusted MSCI certification service, to build credibility among investors.
Stakeholder Alignment
Aligning sustainability efforts with stakeholder expectations ensures resonance with investors, procurement partners, and regulators.
Disclosure Quality and Data Accuracy
Accurate, well-structured ESG data builds analyst confidence and strengthens overall MSCI rating performance.
Governance Strengthening
Clear board-level oversight and accountability structures form the foundation of a credible MSCI ESG rating.
A Strategic Path to Excellence
Oren provides a structured approach to help businesses meet MSCI's rigorous ESG rating criteria and achieve meaningful improvements.
Gap Analysis & Benchmarking
Identify gaps in your ESG performance and benchmark against industry leaders to develop targeted improvement strategies.
Policy Enhancement & Data Accuracy
Update policies and ensure accurate, transparent ESG data to align with MSCI requirements.
Comprehensive ESG Strategy
Develop and implement ESG initiatives that align with MSCI's key rating factors for sustainable growth.
Risk Mitigation & Opportunity Capture
Address ESG risks proactively and leverage sustainability opportunities to enhance business resilience and market positioning.
Oren's MSCI Rating Improvement Approach
Oren offers MSCI ESG solutions by combining strategy consulting, AI-powered data tools, and gap analysis to align company practices with MSCI criteria.
01
Material Issue Identification
Oren identifies key ESG issues based on stakeholder expectations, regulations, and MSCI industry criteria.
02
Data Collection & Diagnostics
Existing KPIs, policies, carbon data, and operational metrics are assessed against MSCI disclosure requirements using AI-powered tools.
03
Stakeholder Engagement
Interviews and surveys across internal HR teams, suppliers, and stakeholders ensure all material perspectives are captured.
04
Gap Analysis
Evaluates performance against MSCI criteria and compares with industry peers to identify gaps, strengths, and priority areas.
05
Goal Setting & Strategy Development
Uses SMART goals to guide ESG strategy, with reporting aligned to frameworks like GRI, SASB, and TCFD.
06
Ongoing Monitoring & Advisory
Oren continuously tracks ESG performance and guides on how to improve ratings and align with regulatory and investor expectations.
Consequences of a Low MSCI Rating
A poor or declining MSCI ESG rating impacts financial performance, damages reputation, and weakens long-term business stability.
1. Reputational Damage
Poor ratings generate negative publicity and reduce brand value, weakening consumer trust and pushing customers towards better-rated competitors.
2. Higher Cost of Capital
Companies with lower MSCI ESG ratings often pay higher interest on loans and offer better returns to attract investors. This increases costs and limits long-term growth.
3. Reduced Investor Appeal
A low rating signals poor ESG risk management to institutional investors. Attracting and retaining investment from ESG-focused funds becomes significantly harder.
4. Weakened Market Position
Low-rated companies consistently underperform across profitability, operational efficiency, and financially material ESG metrics. The gap with higher-rated competitors widens with time.
5. Talent Acquisition Challenges
Low-rated companies struggle to recruit and retain skilled talent, weakening long-term competitiveness and organisational capability.
6. Higher Controversy Risk
Companies rated B or CCC are more likely to face ESG-related issues and operational problems. In severe cases, this can lead to significant financial difficulties.
Ready to lift your MSCI rating?
Let's map your gaps, prioritise material issues, and build a measurable improvement plan.
How Oren Sustainability Hub Helps
Oren Sustainability Hub brings together the tools, expertise, and strategic guidance needed to make MSCI rating improvement accurate, structured, and measurable.
Performance Tracking
ESG performance is continuously monitored against MSCI criteria and industry benchmarks, keeping organisations informed of progress and areas requiring attention ahead of each rating cycle.
Disclosure Enhancement
Responses and disclosures are reviewed and refined to meet MSCI's evaluation standards, ensuring data is communicated clearly and reflects the strongest possible performance.
AI-driven Data Readiness
ESG data is consolidated and structured within a single platform, ensuring accuracy and consistency across all MSCI-relevant metrics.
Regulatory & Framework Alignment
Reporting is mapped against globally recognised standards including GRI, SASB, and TCFD, ensuring MSCI disclosures remain consistent with broader ESG and regulatory expectations.
End-to-End Accountability
From initial data collection through to final disclosure, Oren manages the entire process with precision, ensuring nothing falls through the gaps across any rated ESG dimension.
What Our Clients Say
“Oren is very professional, and they deliver their services and commitments in a time-bound manner. The products they have developed are absolutely topnotch and it caters to all our requirements.”
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Atul Khanapurkar
Executive Director, Shriram Pistons & Rings
“Oren's technology and expert advisory helped us overcome data management hurdles and navigate stakeholder engagement, materiality assessment and quantifying environmental impact to publish our first BRSR report.”
Shalaka Ovalekar
Company Secretary and VP-Legal, ADF Foods
“Oren immensely helped us with our Scope 1 and Scope 2 reporting. Overall, the team is well updated and very supportive - and they were always just a call away. I definitely recommend Oren to anyone who is looking for assistance in their ESG journey.”
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Vidhi Thukral
Senior Manager, Max Financial Services
“Oren's expertise has been instrumental in driving our ESG achievements, consistently guiding us with professionalism, reliability, and timely execution. Their outstanding products not only surpassed expectations but also fully complied with Metrochem API Industries' ESG standards.”
Gandupalli Santosh Kumar
Deputy Manager - ESG/Sustainability, Metrochem API Pvt. Ltd
“Oren is very professional, and they deliver their services and commitments in a time-bound manner. The products they have developed are absolutely topnotch and it caters to all our requirements.”
Hover to watch
Atul Khanapurkar
Executive Director, Shriram Pistons & Rings
“Oren's technology and expert advisory helped us overcome data management hurdles and navigate stakeholder engagement, materiality assessment and quantifying environmental impact to publish our first BRSR report.”
Shalaka Ovalekar
Company Secretary and VP-Legal, ADF Foods
“Oren immensely helped us with our Scope 1 and Scope 2 reporting. Overall, the team is well updated and very supportive - and they were always just a call away. I definitely recommend Oren to anyone who is looking for assistance in their ESG journey.”
Hover to watch
Vidhi Thukral
Senior Manager, Max Financial Services
“Oren's expertise has been instrumental in driving our ESG achievements, consistently guiding us with professionalism, reliability, and timely execution. Their outstanding products not only surpassed expectations but also fully complied with Metrochem API Industries' ESG standards.”
Gandupalli Santosh Kumar
Deputy Manager - ESG/Sustainability, Metrochem API Pvt. Ltd
Frequently Asked Questions
MSCI ESG ratings measure a company's resilience to financially relevant, industry-specific ESG risks. They are assigned on a seven-level scale ranging from AAA to CCC.
MSCI collects over 1,000 data points from corporate filings, third-party sources, and media to score companies across 35 ESG issues on a scale of 0 to 10. These scores are weighted by risk impact and time horizon, then scaled relative to industry peers to produce a final letter grade.
Scores are influenced by industry-specific material issues spanning ESG factors, including climate risk, governance structure, human capital management, product safety, and data privacy.
Improvement in MSCI ESG ratings typically takes a few years. Time-consuming processes include identifying gaps in current ESG practices, implementing new policies, improving disclosures, and aligning operations with ESG practices.
ESG reporting frameworks provide structured guidelines for how companies disclose sustainability information. MSCI ESG ratings are obtained through an independent external assessment that evaluates how well a company manages material ESG risks.
MSCI uses corporate filings, press releases, financial statements, sustainability reports, and third-party data — including GHG emissions, governance structures, product safety records, labour practices, and data privacy policies.
Challenges include the lack of standardised ESG data, insufficient disclosure quality, frequent methodology updates, limited cross-functional collaboration, and weak governance frameworks. Companies also have to navigate how MSCI weights specific issues within their industry, which makes structured guidance necessary.
Oren provides end-to-end support across material issue identification, gap analysis, disclosure refinement, and more. We use AI-powered tools and sustainability expertise to guide organisations through step-wise improvement.
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