Meanwhile, US and UK see political freedom scores slip

abrdn’s Research Institute (ARI) has announced the results of its annual ESG Index that ranks and scores 135 countries across 19 environmental, social and governance (ESG) indicators to support investment analysis and decision-making.

It has revealed that:

  1. Scandinavian countries continue to rank at the top of the index with Sweden ranking first place followed by Switzerland, Finland, Norway and Denmark. Japan and South Korea are the only Asian countries to feature in the overall top 20, while many of the laggards are war-torn countries and those that have experienced serious ongoing human rights abuses. Wealthy Middle Eastern countries doing little to improve their ESG scores also rank at the bottom, while many poorer African and Eastern European countries are making significant strides.
  2. In a ranking which takes development bias into account, Sweden, Switzerland and Finland continue to outperform. They are joined in the top 20 by four African countries: Liberia, Malawi, Niger and the Democratic Republic of Congo.
  3. The UK has ranked 10th, the same place it was 10 years ago. Positive indicators show a reduction in coal use and CO2 intensity, whilst ranking highly on species protection. However, like many developed countries, its political and governance indicators have worsened over the past decade with sharp declines in transparent laws and social group equality.
  4. The US has ranked outside the top 20 countries, coming in at 25th (a drop of four places since 2012). It has declined in all political and governance scores over the course of the Trump administration, including less freedom of speech and law transparency. The ESG index also highlights the soaring level of income inequality in the country. It comes 81st out of 135 countries, ranking below Russia and China. The country also remains heavily reliant on fossil fuels with only 20% of its energy coming from renewables.
  5. 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 the weak performances by countries such as the US and Germany.
  6. China’s macro ESG story is a nuanced one. It scores well on social indicators like gender equality, life expectancy and child mortality, but poorly on most political and governance indicators and CO2 emissions. The emissions intensity of the economy has improved over the past decade and the authorities plans to decarbonise the economy are more ambitious than the typical emerging economy. Encouragingly, there are also tangible improvements in the absence of corruption in China over the past 10 years, which reflects the success of Xi Jinping’s anti-corruption campaign. However, these improvements contrast with China’s performance on freedom of expression and social group equality indicators, which show a marked deterioration over the past decade.


ARI’s ESG index captures data from over the past decade to highlight the ESG issues and challenges faced in each country. It pinpoints the progress and how each can be bettered in ways that are appropriate for the individual nation.

It’s 19 indicators, which are aligned to the EU’s Sustainable Development Goals (SDGs), are identified as follows:

Environmental - CO2 emissions intensity; air quality; species protection; and, drinking water.

Social - life expectancy at birth; mortality rate under 5; mean years of schooling; expected years of schooling; gender inequality index; wellbeing ladder index; employment to population ration; and, income inequality.

Governance (& political) - civil society engagement; social group inequality; freedom of expression; absence of corruption; clean elections; transparent laws with predictable enforcement; and, access to justice.

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.

“We want to increase the understanding that ESG factors are fundamental for a country’s growth and development, and the very specific measures we have used make it easy for investors to see what can be improved and where. Tracking improvements or steps backward in subsequent years essentially helps paint a vivid picture for investors.”


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