Chicago-based Morningstar confirmed it would reduce the headcount of its Sustainanalytics subsidiary, a global provider of environmental, social and governance research and ratings, by 10% to 12%, or about 200 jobs.
According to a Morningstar spokesperson, the company was “in the process of making adjustments to strengthen the financial footing of the business," namely a “a closer alignment” of Morningstar Indexes and Morningstar Sustainalytics announced in June.
That June press release referred to the units as "two of Morningstar's fastest-growing product areas."
The company refused to provide further specifics on the employees who would be let go. The news was first reported by Reuters.
In September 2020, at that year’s virtual annual Morningstar conference, Michael Jantzi, CEO of Sustainalytics, said sustainable investing was at an “inflection point,” as interest in ESG investing continued to expand beyond institutional investors to individuals. Jantzi also said he believed the COVID-19 pandemic had not inhibited the growth of interest in sustainability among investors. However, at the following year’s in-person Morningstar conference, Cheryl Gustitus, executive vice president of Sustainalytics, said given the flurry of terminology, flood of investment product marketing and dizzying amounts of data, many advisors didn’t feel comfortable having the “sustainable investing” conversation with their clients.
In October 2021, the six employees of the ESG analysis startup Act Analytics announced they would be joining Sustainalytics by the end of the month, with Act Analytics founder and CEO Zachary Dan taking on the role of director of digital innovation at Sustainalytics.