Sustainability index shows countries' mixed ESG progress

Scandinavian countries continue to top the Global Sustainable Competitiveness Index while China overtook the U.S. for the first time, according to the 2023 edition released Nov. 21.

The GSCI produced by ESG analytics firm SolAbility is based on 190 quantitative indicators from international organizations. It allow investors and others to assess country-specific and issue-specific risks and progress on sustainability in the context of competitiveness.

The six subindexes are Natural Capital, Resource Efficiency & Intensity, Social Cohesion, Intellectual Capital, Economic Sustainability and Governance Efficiency. So far, four governments officially use GSCI to benchmark progress on sustainability and competitiveness.

As with previous years, the 2023 grades were not impressive, with a 43.4% average sustainable competitiveness score and the highest score of 59.8%, earned by Sweden. "Even the leading nations are far from being truly sustainable and competitive," a GSCI report said. "A somewhat alarming 38% of all indicators are deteriorating, while 52% show positive developments. We are going forward and backwards at the same time," it said.Scandinavian countries took five of the top six spots. The top 20 are dominated by northern European countries, with Japan the only non-European country making the cut.

For the first time since the index was published in 2012, China ranked higher than the U.S., at 30 compared with 32, with strong marks for intellectual capital. Asian nations including South Korea, Japan, Singapore and China led in the Intellectual Capital subindex that signals innovation.

The U.S. overall ranking was "particularly low in resource efficiency and social capital — potentially further undermining the global status of the US in the future," the report said.