Swiss investment group RobecoSAM has ranked Sweden the most sustainable country in the world in its recent ranking of 59 countries, which gauges a wide range of environmental and social governance issues like carbon emissions, social cohesion and civil liberties.
RobecoSAM says it designed the report to offer investors a deeper insight of issues that may affect a country's credit rating but are not typically considered by traditional sovereign ratings, like climate change.
Sweden ranked No. 1., earning high scores across nearly all criteria and counter to many developed countries, also scoring well on environmental factors like the use of renewable energy sources and carbon dioxide emissions.
Australia ranked No. 2 on the list, which had a particularly high sustainability governance score. Switzerland was No. 3, scoring highly on sustainability environmental, social and governance categories. Making up the rest of the top 10 were Denmark, Norway, United Kingdom, Canada, Finland, the United States and Netherlands. Nigeria and Egypt fell to the bottom of the list, with low scores on managing social issues.
Countries with a stronger sustainability profile also tended to have a lower insurance premium, according to RobecoSAM.
Johan Duyvesteyn, senior researcher at Robeco Quantitative Strategies, said the report highlights the value of gathering information on risks related to a country's sustainability profile, which is even more important during the times when investors are risk averse.
"Our statistical analysis helps us identify which sustainability criteria are financially relevant, which in turn helps us make better-informed investment decisions," he said.
Investors achieved notable victories during this year’s shareholder proxy season, with a near-record 110 shareholder resolutions filed with 94 U.S. companies on corporate sustainability challenges such as climate change, supply chain issues and water-related risks, according to Ceres.