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EMs dominate list of ESG-friendly countries

There are more emerging economies than developed markets in Candriam’s latest list of investable ESG-friendly countries.

Globe Europe green

While the countries with the top 10 highest ESG scores were all developed countries in Europe, there was a growing number of emerging economies included in Candriam’s list of investible countries.

Of the 123 countries analysed and rated in the 2017 report, 74 were deemed investable, while 49 were categorised as non-investable.

Emerging market economies made up a higher proportion of the investable countries with 40 countries making the list versus 34 developed economies.

India, Poland, Mexico, Indonesia and Ivory Coast all made the list and managed to improve their scores for the year. India’s score increased the most. However, in certain areas like human capital and natural capital, its score slipped, thanks to government cuts to education spending and worsening pollution in cities.

Even China, although still deemed non-investable from an ESG perspective, ranking 79th out of the 123 countries scored,  demonstrated improvement in several key areas.

Under the leadership of president Xi Jinping, China has improved its Natural Capital score, investing in more renewable sources of energy. While the region stubbornly keeps adding coal capacity, the rate it is developing renewables is faster.

“The growing economic clout of emerging markets is evident,” said Wim Van Hyfte, global head of responsible investment and research at Candriam.

“Looking at the largest emerging economies, we observe a reorientation of public policies in China and in India in favour of greener growth, while status quo seems to prevail in Russia and Brazil. Both China and India are implementing ambitious renewable energy development programmes, in accordance with the bold commitments they took following the COP21.”

In Europe, Sweden snagged the top spot as the most ESG-friendly country, improving upon its already impressive score from the previous year.

The UK placed 18th out of 123 countries, behind the Netherlands and Germany but ahead of France and the US.

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