Release: 04-11-25

Upcoming Enhancements to our Sustainalytics Enterprise Value Including Cash (EVIC) Calculations - Apr. 9 and May 8, 2025

Licensed Data Release Notes

Updated Apr. 10, 2025

We are excited to inform you about upcoming enhancements to our Sustainalytics Enterprise Value Including Cash (EVIC) calculations that will significantly improve our coverage and reporting capabilities. These updates will give clients more insights from our climate research and reporting to help with data visibility and quality.

Here are the key changes and their impacts:

Enhancement Details:

  • Update: Morningstar and Sustainalytics will update Climate and Principal Adverse Impact (PAI) methodologies to include an alternate EVIC for banks, increasing coverage of financial institutions.
  • Impacted Datasets and Additional Coverage:
    • On Apr. 9, 2025: All client workflows and managed portfolios workflow for PAI only were updated with new EVIC-based coverage/calculations for financial institutions.
    • On May 8, 2025: Managed portfolio workflows for climate products (LCTR, PCRM, Carbon Emissions) will be updated on the next monthly production cycle with new EVIC-based coverage/calculations for financial institutions.

Metrics Changes:

  • Financed & Owned Metrics: Increase absolute values (portfolio greenhouse gas emissions, transition value-at-risk, loss amounts) for impacted portfolios, depending on portfolio size and coverage increase.
    • There will be no significant changes to normalized metrics (portfolio carbon footprint, value-at-risk per million invested, loss amounts per million invested).

Estimated Impact:

  • Approximately 50% of managed investment portfolios will gain EVIC coverage for banks.
  • Out of 40,000 managed investment portfolios, around 20,000 will have at least one holding gaining coverage via EVIC for banks.

Client Awareness:

  • Clients do not need to take any action for this enhancement. The data coverage will flow automatically, but clients who utilize the above-noted impacted datasets in Morningstar products should know they will see value changes.

We are committed to delivering the highest quality data and insights to support your investment decisions. If you have any questions or need further information, please do not hesitate to contact Morningstar Support.