Snapshot - Market News

Which are the world’s most sustainable investment markets?

Schroders research finds that the biggest social and environmental benefits are achieved in countries imposing the greatest regulatory requirements, where Europe leads the way.

17/05/2019

Investment Communications Team

Investment Communications Team

Schroders

Switzerland, Singapore and the US are the most sustainable investment markets in the world and companies listed in these countries are delivering the most positive social and environmental benefits, research by Schroders has revealed.

Indonesia, Russia and Thailand were found to be the least sustainable markets, with companies in these countries having the most negative social and environmental impacts. Europe accounts for seven of the world’s top 10 most sustainable markets, while the least sustainable were resource-dependent emerging markets.

Companies which face the greatest social and regulatory pressures from governments and regulators tended to deliver the biggest social benefits.

The research was carried out using Schroders’ new tool SustainEx. Find out more about SustainEx here: SustainEx: Quantifying the hidden costs of companies’ social impacts

Switzerland is the world’s most sustainable investment market

most-sustainable-investment-markets.jpg

By industry, companies in the water, biotechnology and pharmaceuticals sectors provide the greatest social benefits, whereas gambling companies created the biggest social costs, relative to their importance in stock markets.

Switzerland’s position at the top of the list was driven by the country’s high concentration of listed pharmaceutical and technology firms.

Andrew Howard, Schroders’ Head of Sustainable Research, said:

“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 have tangible financial costs.

“It is therefore more important than ever that investors consider the social impacts of companies and portfolios, rather than relying purely on financial measures. How companies make money is as important as how much they make today”.

Schroders identified some of the world’s most sustainable investment markets and sectors by analysing the net benefits or costs companies create per $100 of revenue they produce. The research looked at 9,000 companies and ranked the world’s main stock markets according to their overall impact on society, putting a dollar value on their social and environmental impacts.

  • Read more of our Sustainability insights here

The opinions contained herein are those of the author and do not necessarily represent the house view. This document is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Cazenove Capital does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Cazenove Capital has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Cazenove Capital is part of the Schroder Group and a trading name of Schroder & Co. Limited 12 Moorgate, London, EC2R 6DA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. For your security, communications may be taped and monitored. 

Contact Cazenove Charities

Achieving your charity's investment objectives takes time and thought. To find out how we can help you please contact:

Kate Rogers

Kate Rogers

Co-head of Charities kate.rogers@cazenovecapital.com
Alex Baily

Alex Baily

Co-head of Charities alex.baily@cazenovecapital.com