MSCI has made changes to its fund ESG ratings methodology that will mean 31,000 funds will see a one-off ratings downgrade.

MSCI says the new methodology will look to raise the requirements for a fund to be assessed as “AA” or “AAA” rated and improve stability and transparency in fund ESG ratings. The changes will mean the proportion of funds rated as AA will fall from 32.8% to 22.4% and those rated AAA will fall from 19.9% to 0.2%.

The firm says the methodology changes were driven by consultations with clients and are not linked to regulatory developments in the EU or elsewhere.

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