Ross Kerber, Simon Jessop

LONDON/NEW YORK -MSCI Inc (Reuters), which rates countries and companies on their performance in environmental, social, and governance (ESG), said Tuesday that it had downgraded Russia, Belarus, and other nations as a result of Moscow’s invasion.

Analysts said that the move may increase pressure on west asset managers to get out of Russian debt and stocks, even though few ESG-focused funds have much Russian stock or debt.

MSCI announced that it has cut Russia from “BBB”, and Belarus from “BB” to “B,” with immediate effect. It said that ratings ranged from “AAA” the most high to “CCC,” which is the lowest.

We are closely monitoring the situation and consider there to be a significant downgrade in Russia’s ESG government rating. MSCI stated in a statement that it is possible for further developments to drive another downgrade.

Todd Rosenbluth is head of ETF/Mutual Fund Research at CFRA Research. He stated that the downgrades will likely not have any impact on ESG funds due to their low exposure to Russia, China, or other large markets.

Rosenbluth reported that Russia is home to only 3% (NYSE:) of BlackRock Inc.

BlackRock refused to answer questions about downgrades and the possible impact they could have on its index funds. A spokesperson for BlackRock stated that the company is working with index providers, regulators and market participants to ensure clients are able to exit Russian securities positions where permitted.

BlackRock said that it will adhere to all regulations and laws pertaining to sanctions. [L1N2V41XQ]