Where are the most sustainable investment markets?

Schroders ranks markets based on positive social benefits

Where are the most sustainable investment markets?
Steve Randall

A new analysis reveals the investment markets where companies are delivering the most positive social benefits.

To discover which are the most sustainable investment markets in the world, wealth manager Schroders analysed 9,000 companies and ranked the world’s main stock markets according to their overall impact on society, putting a dollar value to their social and environmental impacts.

The data was aggregated according to countries’ stock-market domicile or industry group.

It found that companies in Switzerland, Singapore, and the United States delivered the most positive benefits according to its SustainEx model which analyzes the net benefit or costs a company creates per $100 of revenue they produce.

Of the top 10 most sustainable markets 7 were in Europe, while resource-dependent emerging markets were among the least sustainable.

Ask “how?” as well as “how much?”
“Companies and countries are coming under growing pressure from regulators and society to consider their impacts on challenges like climate change, pollution and obesity. As those social tensions become more acute, it’s becoming more likely that these social and environmental externalities will become tangible financial costs,” said Andrew Howard, Schroders’ Head of Sustainable Research.

He added that it’s important that investors consider the social impacts of companies and portfolios, rather than just focusing on financial measures.

“How companies make money is as important as how much they make today. We developed SustainEx to provide an objective view of the threats and opportunities companies and markets face to help our analysts, fund managers and clients navigate an increasingly complex world.”

The sectors that outperform
By sector group, companies in the water, biotechnology and pharmaceuticals sectors provide the biggest social benefits whereas gambling companies created the biggest social costs, relative to their importance in stock markets.