Sustainable investing is no longer a niche activity. Investors around the world are looking for ways to learn whether the investments they own reflect the best sustainability practices, because sustainability aligns with their personal values or simply because they believe it leads to better investment outcomes. We identified three reasons why people choose to invest sustainably: to lower the amount of risk in a portfolio; to align with their personal or religious values; to take an active role in influencing an issue or behavior, either at a particular company or in society as a whole.

That’s why we announced the Morningstar Sustainability Rating for funds in March 2016; as well as expanded sustainability research, data, and analytics. Morningstar defines sustainable investing as a long-term approach that incorporates environmental, social, or governance (ESG) factors into the investment process.

Our ratings measure how well the companies in a portfolio are managing their ESG risks and opportunities and provide a basis for comparison across funds. They give investors a new lens to analyze any fund, regardless of whether it has a specific sustainability or ESG mandate.