Morningstar’s Smit to head up sustainability service

Added 1st March 2016

Steven Smit, currently CEO of Morningstar’s Benelux unit has been appointed head of sustainability at the research and investment consulting business.

Morningstar’s Smit to head up sustainability service

Smit will be responsible for leading the firm’s new sustainability ratings service. The new service, which launched on Tuesday and has so far been rolled out across 20,000 funds is designed to help investors evaluate funds on their environmental, social and governance characteristics, the firm said.

Helping Smit is John Hale, previously head of manager research for North America, who has been named head of sustainability research.

According to the firm, initially the ratings will be rolled out within its DirectSM research platform but, within the coming weeks will be rolled out on other platforms and websites.

The ratings are based on the underlying fund holdings and company-level ESG research and ratings from Sustainalytics, the firm said.

Smit said: “Given the widespread and growing interest in sustainable investing around the world, investors need better tools to help them determine whether the funds they own or are considering adding to their portfolios reflect best sustainability practices,” Smit said.

At launch, of the approximately 20,000 funds with Morningstar Sustainability Ratings, 10% received 5 globes (A high rating), 22.5% received 4 globes (above average), 35% received 3 globes (average), 22.5% received 2 globes (below average), and 10% received 1 globe (low), the firm said.

According to the initial analysis, funds with explicit sustainable or responsible mandates are generally practicing what they preach, Morningstar said.

“Nearly two out of three such funds received the highest ratings, more than double the percentage of funds with Sustainability Ratings overall,” it said, but added: “It’s important to note that funds with explicit sustainable or responsible investment mandates comprise only about 2 percent of the fund universe.”


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Geoff Candy joined Portfolio Adviser as News Editor in May 2014. He has been a financial journalist and broadcaster since 2005 and, in that time has worked in both South Africa and the Netherlands, covering everything from high street retailers and construction companies to mining and insurance.



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