Sustainalytics Layoffs: Morningstar Confirms ESG Team Staff Cuts

Sustainalytics layoffs will impact roughly 10% to 12% of employees at the Morningstar business unit, Reuters reported.

Morningstar Sustainalytics is an ESG (environmental, social, governance) data, research and ratings firms that assists asset managers and pension funds with ESG information and assessments. The organization has roughly 1,800 staff members, which means the Morningstar Sustainability layoffs will impact roughly 180 to 216 employees.

In an email to Reuters, a Morningstar spokesperson wrote: "As a part of this alignment, we are in the process of making adjustments to strengthen the financial footing of the business. We remain committed to growing our ESG capabilities and will continue to invest in this area going forward."

Sustainalytics Layoffs: Politicians, Big Business and Venture Capital Influence ESG

The Sustainalytics job cuts surface at a key time. Among the key anecdotes to note:

• Some Republicans have pushed back against businesses and investment firms that integrate climate and social goals into their business plans, Politico notes.
• Republican attacks on ESG aren't stopping companies in red states from going green, according to NPR. But some major businesses are re-thinking when they do and don't use the ESG term, Fortune reports.
• Funding for climate tech startups dropped roughly 40% in the first half of 2023, according to Climate Tech VC.

Roll all of those variables together, and they may have influenced Sustainalytics' business performance -- and Morningstar's strategy for the business unit, Sustainable Tech Partner believes.

Green Job Growth, Individual Company Challenges

Meanwhile, the overall sustainability job market remains strong -- as businesses seek employees to fill green IT, renewable energy, and energy transition jobs. Indeed, demand for green jobs in the United States has grown roughly 50% since 2019, according to Lightcast.

Still, some green-oriented companies have cut jobs amid business or financial challenges. For instance, ChargePoint laid off 10% of its staff and reorganized operations amid weaker-than-expected quarterly revenue guidance, the electric vehicle (EV) charging station network company disclosed in September 2023.