Perhaps it's no surprise that a company that provides data on environmental, sustainability and governance factors is itself a model of sustainability best practices. Moody's tops IBD's 2024 list of the 100 Most Sustainable Companies for its commitment to combining business and sustainability outcomes.
Moody's has a strong climate management score from Morningstar Sustainalytics and an IBD Composite Rating of 93 out of a best-possible 99, along with a Relative Strength Rating of 85.
The New York-based financial services information provider beat out almost 1,000 companies to rise to the top of our list. The stocks on this list combine strong climate management scores from Morningstar Sustainalytics with superior IBD technical and fundamental stock ratings. Read all the stories in our special report, including the full list and more company profiles.
The company was founded in 1909 by John Moody. It provides data, research and analysis to assess wide-ranging risks. The goal is to help its customers — from investors to corporations — weigh risk and make informed decisions.
Moody's Corp. is a sprawling empire that includes affiliates, joint ventures and wholly owned entities. It has what Warren Buffett has deemed a wide moat that's hard for competitors to replicate. This includes a vast database of more than 450 million companies as well as a well-established global rating agency for debt issuers and investors. In fact, Buffett's Berkshire Hathaway began investing in Moody's in 2000 with a 15% ownership stake.
Read More About The Other Top Winners On Our Most Sustainable Companies List: NRG Energy And T-Mobile US
In terms of sustainability, Moody's seeks to "lead by example," said Rob Fauber, its president and chief executive. "We see a future where business and sustainability outcomes are intertwined."
Moody's Sustainability Practices Are 'Top Tier'
The company's initiatives span everything from supplier diversity (adding over 100 suppliers to its diverse supplier pipeline database) to creating an ambitious decarbonization plan that includes energy efficiency and sustainable procurement guides at a local level.
Through both internal and external messaging, the company continually reinforces its commitment to a low-carbon future. Examples include reducing printing use and working with PrintReleaf, a firm that helps companies meet sustainability goals by reforesting the equivalence of their paper consumption and offsetting carbon emissions tied to their paper and packaging products. Moody's has also redesigned its workstations to reduce power usage and limit packaging waste.
"I'd put Moody's in the top tier with their sustainability practices," said Sanjay Das, a Seattle-based certified financial planner.
Das, who holds the Chartered SRI Counselor (CSRIC) designation, says his firm has followed Moody's sustainability practices and reports for nearly a decade. (The CSRIC credential, offered to financial advisors, focuses on sustainable, responsible and impact investing.)
He lauds Moody's for its multipronged efforts to promote sustainability. In addition to advancing on its climate targets, such as a 94% reduction of Scope 1 and Scope 2 emissions over the past few years (i.e., including direct emissions controlled by Moody's and indirect emissions that result from its business operation), it has made major strides in community impact.
"It's not just a check-the-box kind of thing with Moody's," Das said. "It's more of a long-term commitment to sustainability and fueling job growth" to enhance community engagement.
Promoting Sustainable Communities
In terms of community impact, Das praises Moody's efforts to empower small businesses "to uplift their communities."
Just as Moody's has worked with PrintReleaf to advance its sustainable goals, it has partnered with Village Capital, a nonprofit group that supports early-stage entrepreneurs around the world who seek to address social, economic and environmental challenges.
Through its partnership with Village Capital, which encompasses 15 emerging markets worldwide, Moody's boosts economic mobility and middle-class growth. Moody's employees serve as mentors to new entrepreneurs. These startup business owners benefit from education and access to financial services that can propel growth.
Moody's success has led to its inclusion in the Dow Jones Sustainability World Index and North American Index. Companies in the indexes pass muster through their long-term sustainability efforts, including economic, social and environmental asset management plans.
For The Full List And Details On The Methodology, See IBD's 100 Most Sustainable Companies For 2024
Moody's Offers Transparency, Accountability
Unlike some companies that profess to prioritize sustainability or make vague promises to contribute to a low-carbon future, Moody's stands out by holding itself accountable.
On its website, Moody's itemizes specific, measurable goals tied to climate, nature, employee well-being and other aspects of sustainability. Moody's describes each goal along with its current status in pursuit of the goal.
"We are committed to transparency and will monitor our performance against each goal, disclosing our progress on an annual basis," the company writes.
One of the goals is to have all of Moody's employees in green-certified spaces. The current status is 63%, the company says.
By providing a sustainability progress report on its website, Moody's doesn't just hold itself accountable for follow through. It also reinforces what Das admires about its ESG initiatives. That's the commitment to treat sustainability as a top priority over the long term rather than as the latest trend.
Progress On Climate And Sustainability Targets
In its 2023 performance report on sustainability, Moody's reports it has achieved a 94% reduction of Scope 1 and Scope 2 emissions from its base year of 2019. Scope 3 emissions from business travel, employee commuting, and fuel- and energy-related activities have been reduced by 36% from 2019. That beats its 2025 target of 15%.
Moody's has achieved 100% of continued renewable electricity sourcing for its global operations, and ongoing offsetting for its remaining operational emissions.
