Sweden proves world's most sustainable country

RobecoSAM’s new study has found Sweden to be the most sustainable country in the world.

The study, which evaluates 59 countries (21 from developed and 38 from emerging markets) on a broad range of Environmental, Social and Governance (ESG) factors relevant for investors, ranked Sweden top with a score of 8.25 out of 10. Rounding out the top three were Australia and Switzerland with scores of 7.87 and 7.83 respectively.

Sweden earned high scores across almost all criteria and contrary to many developed countries, also scored well on environmental factors such as the use of renewable energy sources and CO2 emissions.

The framework primarily focuses on mid to long-term factors that have an indirect impact on a government’s ability to repay its debt or raise revenues, but that are not considered by traditional sovereign ratings.

Results indicate that a stronger sustainability profile corresponds to a lower insurance premium, suggesting that there is added value in gathering information on risks related to a country’s sustainability profile in times of risk aversion.

Investors’ demand for long-term oriented strategies that integrate ESG considerations across a range of different asset classes is likely to grow; particularly in the wake of the financial crisis, which exposed some of the shortcomings of traditional measures used to evaluate country risk.

This the first Country Sustainability Ranking produced by RobecoSAM and Robeco; Robeco began to conduct research into country level sustainability in 2008.