Scandinavian countries continue to rank at the top of Abrdn Research Institute’s ESG Index, with Sweden topping the list followed by Switzerland, Finland, Norway.
The annual ESG Index, which ranks and scores 135 countries across 19 ESG indicators, has revealed Sweden, Switzerland and Finland continue to outperform. The countries are joined in the top 20 by four African countries including Liberia, Malawi, Niger, and the Democratic Republic of Congo.
The UK ranked tenth, the same place it was 10 years ago. The country’s positive indicators include a reduction in coal use and CO2 intensity, while ranking highly on species protection.
Carbon emission intensity is the most improved indicator for many of the top performing economies. However, many of these countries still produce very high levels of carbon dioxide which is reflected in performances by countries such as the US and Germany.
However, like many developed countries, political and governance indicators have worsened over the past decades with sharp declines in transparent laws and social group equality.
Meanwhile, the US has ranked outside the top 20 countries, coming in at 25, a drop of four places since the 2012 ESG Index. The country declined in all political and governance scores over the course of the Trump administration, which included less freedom of speech and law transparency.
The record level of income inequality in the US was also highlighted in the ESG Index which comes 81st out of 135 countries ranking below Russia and China. The US also remains heavily reliant on fossil fuels, with only 20% of its energy coming from renewables.
Meanwhile, China had a mixed score, doing well on social indicators such as gender equality, life expectancy and child mortality, but poorly on most political and governance indicators and CO2 emissions.
Over the past 10 years, during Xi Jinping’s anti-corruption campaign, there have been some improvements, however these contrast with China’s performance on freedom of expression and social group equality indicators.
Stephanie Kelly, deputy head of ARI, said: “The aim of the ESG Index is to better support our investment teams with their ESG analysis. It’s particularly interesting to see many of the developed countries ranking low on political and governance factors over the past decade, particularly in the US where the Trump administration has had a major impact.”
“However, the improving carbon emissions intensity for many of the top performing economies is certainly a good news story, perhaps reflecting that the policy efforts being made in these countries to reduce emissions are having a clear effect.”
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