Morningstar Sustainalytics revenue declined 9.7% to $27.9 million in Q3 24 compared to the prior-year period. The largest contributor to the trend was a slowdown in revenue attributable to ESG Risk Ratings driven in part by vendor consolidation, as many clients rationalized their ESG providers following a period of strong growth when they may have purchased multiple, overlapping ESG products. In addition, clients have remained focused on regulatory compliance and less on investment integration, which results in more limited opportunities for expansion. Finally, we’ve observed softness specifically in the retail asset management customer segment as ESG fund launches and flows slowed sharply in 2023 and into the first half of 2024 driven by net outflows in the U.S., and weaker inflows in Europe compared to stronger dynamics in 2021 and 2022. The second largest driver of the decline was a slowdown in our licensed ratings product in corporate solutions as we streamlined that product, as described in more detail in a response to a related question this quarter.
Morningstar Sustainalytics revenue declined in both North America and in EMEA in Q3 24 compared to the prior-year period, although we’d note that growth for the year-to-date through September 2024 is positive in EMEA compared to the prior-year period and we continue to see opportunities in EMEA for both new client acquisition and expansion, supported by regulatory trends in that market.
Over the past two years, we have realigned our contractual terms to provide more meaningful and comparable data around retention rates. We disclose revenue renewal rates annually. We would note that the vendor consolidation and rationalization that we’ve experienced has had a negative impact on retention rates through the first nine months of 2024.
We’re limited in our ability to comment on our competitors’ results. That said, while Morningstar Sustainalytics revenue related to climate products increased in Q3 24 compared to the prior-year period, we have noted challenges in this space, and this has in turn also put pressure on our broader retention efforts with clients who have already selected one of our competitors to provide climate data. We believe that competitors are also able to leverage their strengths in other areas, including indexes, in support of their ESG products.