Moody's Forms Strategic Alliance to Boost ESG Solutions - BlackRock (NYSE:BLK), AssetMark Financial Hldgs

　　Moody's Corp.MCO and MSCI Inc.MSCI have entered into an agreement to establish a strategic partnership to capitalize on each other's strengths to enhance transparency in environmental, social, and governance (ESG) and sustainability in markets and make better decisions. The financial terms of the deal remain confidential.

　　Moody's will utilize MSCI's sustainability data and models, which are widely used by the world's major asset managers and asset owners. The agreement includes MSCI's industry-leading ESG ratings and content, which assesses a company's management of financially significant ESG risks and opportunities.

　　Through access to MSCI data, Moody's plans to migrate its existing ESG data and scores to offer MSCI's sustainability content through a wide array of solutions serving its customers in the banking, insurance and corporate sectors.

　　MSCI will gain accessibility to Moody's Orbis database, the world's prominent source of firmographic information with data on more than 500 million entities, to expand its private company ESG coverage. Additionally, both companies will evaluate solutions that utilize Moody's private company data and credit scoring models to offer deeper insights into the private credit market.

　　Rob Fauber, president and CEO of Moody's, said, “This is a real win-win, as Moody's customers gain access to MSCI's renowned ESG content and MSCI customers will gain access to Moody's world-class risk assessment expertise, data and insights.”

　　Henry A. Fernandez, chairman and CEO of MSCI, said, “Sustainability remains one of the most important trends reshaping the global investment landscape, and the shift to private assets is another. This agreement will help MSCI expand our private company ESG coverage and deliver enhanced solutions across client segments and asset classes.”

　　This alliance doesn't affect Moody's Ratings, the credit rating agency, which will continue offering transparency on the material impacts of ESG factors on its credit ratings via its proprietary Credit Impact Scores and Issuer Profile Scores. Moody's Ratings will further keep providing its sustainable finance offerings, which include Second Party Opinions and Net Zero Assessments. Furthermore, MCO remains committed to providing its top-tier climate solutions to its customers.

　　This move aligns with Moody's aim to boost the scale of its business and augment its offerings and solutions. This is also demonstrated through the opportunistic buyouts undertaken by the company over the years. In 2023, it acquired SCRiesgo to deepen its presence in Central America and the Dominican Republic. In 2022, MCO bought 360kompany AG to strengthen its Know Your Customer capabilities, while in 2021, it acquired PassFort Limited.

　　Over the past six months, the company's shares have risen 10.4% compared with the industry's growth of 0.8%.

　　Moody's currently carries a Zacks Rank #4 (Sell).

　　Other Financial Services Firms Taking Similar Steps

　　Last month, BlackRock Inc.BLK entered into a strategic partnership with GeoWealth, a financial technology firm, to expand its capabilities to cater to the needs of clients in the $37 trillion U.S. wealth market. This move aligns with the company's growth strategy to boost its offerings.

　　BLK aims to offer custom models via GeoWealth's platform, enabling advisors to address client demand for private markets, direct indexing and fixed-income SMAs alongside traditional ETFs and mutual funds, all within a single account.

　　Similarly, AssetMark Financial Holdings Inc.'s AMK wholly-owned subsidiary AssetMark Inc. entered into a strategic coalition with Morningstar Wealth. The transaction, approved by the board of directors of both companies, is expected to be closed in the second half of 2024, subject to regulatory approvals.

　　AMK will acquire roughly $12 billion in assets from Morningstar Wealth Turnkey Asset Management Platform (“TAMP”) as part of the alliance. AssetMark's platform, which offers top-tier service, advisor technology, business consulting and a diligently selected group of investment strategists, will be accessible to financial advisors and clients on Morningstar Wealth's TAMP.

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