Morningstar have today released their Sustainability Atlas, providing a global geographical overview of how companies manage both impactful and material environmental, social and governance (ESG) issues.
The Atlas examines 35 Morningstar Country Indexes through six maps, showing the range of Country Index Scores on overall sustainability and its components.
Highlights of the Morningstar Sustainability Atlas include:
• The Morningstar Portugal Index has the highest Morningstar Sustainability Score of 67.5. Portugal has a low Morningstar Controversy Score, which signals that none of the constituents in the Portugal Index are currently involved in a major ESG-related controversy. Additionally, despite Portugal being a small and concentrated index, the basket is mostly composed of stocks with ESG scores that rank above average or high in their respective global industry peer groups.
• With a score of 51.8, the UK ranks near the bottom of the table for European country indices, although it outscores the US and Canada.
• European Nordic countries are a key area of opportunity for sustainable investments. The Denmark, Sweden, Norway, and Finland indices all rank in the highest quintile on Sustainability Scores. The highest scoring non-European country is Australia at 53.9; the United States ranks in the second lowest quintile of the group at 47.0 while the Morningstar Russia Index scored the worst at 38.5.
• On a regional basis, European countries tend to have strong ESG performance relative to their global industry peers. Asian and emerging markets countries tend to have lower scores overall and on all three components—environmental, social and governance.
• Corporate governance has been a work in progress for Japan for a number of years; the Morningstar Japan Index fared poorly on this issue, with a second-lowest Governance Score of 44.6. With a Governance Score of 40.4, China sits at the bottom of the group, with an index tilted toward government-controlled firms that may place state interests ahead of shareholders.
View the Morningstar Sustainability Atlas by clicking here.