MSCI Cuts Russia's Sustainability Rating to Lowest Level
March 09 2022 - 8:52AM
Dow Jones News
By Maitane Sardon
Index and rating provider MSCI Inc. said it had cut Russia's
sustainability rating to the lowest level, based on the increasing
environmental, social and governance risks faced by the country
after its attack on Ukraine.
MSCI's ESG research arm, which measures countries' and
companies' performance on financially relevant sustainability
issues, said Russia's rating now stands at triple C.
The downgrade, which is effective immediately, came days after
MSCI said it was cutting the country from triple B to B. MSCI's
ratings range from triple A, the highest, to triple C, the
lowest.
The further downgrade was prompted by higher "economic
environment" and "financial governance" risks due to Russia's
financial isolation amid the growing web of Western restrictions,
the company said. Some of the factors behind the decision included
the freeze of its central bank's assets, sanctions placed on
oligarchs by several countries, and its banks' barring from the
Swift payments system.
Several money managers have recently said they are no longer
adding Russian government bonds and shares to their funds in light
of the events. BlackRock Inc., the world's largest asset manager,
said last week that it had stopped trading Russian securities
across its actively managed and index funds. In a statement on its
website on Monday, Vanguard said it had suspended purchases of
Russian securities from its actively managed funds and was working
to exit positions across its index funds.
MSCI's move follows its prior decision to remove Russia from its
MSCI Emerging Markets index.
Write to Maitane Sardon at maitane.sardon@wsj.com
(END) Dow Jones Newswires
March 09, 2022 08:37 ET (13:37 GMT)
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