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ESG

Morningstar: Netherlands leads list of countries with strong ESG companies

Dutch companies are the world's sustainability leaders, said a recent report from Morningstar.

In an analysis of 46 country indexes and their constituents on environmental, social and governance factors, Morningstar found the Netherlands index took the top spot with a score of 60.54, helped by high-scoring companies like ASML Holding, ING Group, Philips, and Ahold Delhaize. (Scores are calculated on a scale of 0-100).

Dan Lefkovitz, a Morningstar index strategist and the report's author, said in email that ASML is considered an industry leader within the global semiconductor industry, with an environmental score of 87, social score of 84 and governance score of 83, while ING Group and Ahold Delhaize are considered outperformers in global banking and food retail, respectively. ING had an environmental score of 90; social, 85; and governance, 82. Ahold's respective scores were 65, 70 and 77.

The next highest scoring country based on sustainability criteria was Denmark at 60.47, followed by Finland at 60.2.

Outside of the Nordic region, other countries with high sustainability scores included Portugal at 58.5; France, 57.6; Colombia, also 57.6; and Spain, 55.2.

Colombia's score was helped by financial companies Bancolombia and Grupo Sura and petroleum company Ecopetrol, Mr. Lefkovitz wrote.

In addition to Colombia, several other emerging markets received sustainability scores above 50 — Hungary, 53.5; Taiwan, 52.6; and Turkey, 50.9.

The U.S., by comparison, received a score of 45.2, dragged down by ESG-related controversies at Wells Fargo & Co., Johnson & Johnson and Apple Inc.

The lowest scoring countries were Qatar at 37.2; Russia, 37.6; and China, 39.2, Morningstar said.

The full report, which was released Monday, is available on Morningstar's website.