Australian companies score well in sustainability
Australian companies have scored well when it comes to sustainability, especially in the area of governance, in the latest Morningstar Sustainability Atlas report.
This report examines the sustainability profiles of Morningstar’s 46 country-specific equity indexes using company-level environmental, social and governance (ESG) scores.
Sustainability assessments are provided to Morningstar by ESG researcher Sustainalytics, which assigns ESG Scores to 7,500 companies and controversy scores to 14,000 companies.
The country indexes, which span developed and emerging markets and represent 97 per cent of global market capitalisation, vary significantly across ESG criteria.
While Australia received high scores in the areas of social and governance but scored poorly in Controversy, the country scored in the middle of the pack for environmental, which took into account assessments of carbon emissions, waste management and energy usage.
Switzerland and the UK were the world's most controversy-plagued markets, with Swiss company controversies including Novartis and UBS, and UK controversies involving HSBC, Royal Dutch Shell, and GlaxoSmithKline.
When it came to its Governance Score, Australia and Colombia were the non-European markets in the globe's top tier, Morningstar said.
“Australian banks Commonwealth Bank of Australia, Westpac, ANZ, and National Australia Bank are all considered standard bearers within their global peer group,” the report said.
Overall, the Netherlands is the world's leading market for company-level sustainability, Morningstar said, with Dutch companies distinguishing themselves with regards to governance.
Recommended for you
Milford Australia has welcomed two new funds to market, driven by advisers’ need for more liquid, transparent credit solutions that meet their strong appetite for fixed income solutions.
Perennial Partners has entered into a binding agreement to take a 50 per cent stake in Balmoral Investors and appoint it as the manager of Perennial's microcap strategy.
A growing trend of factor investing in ETFs has seen the rise of smart beta or factor ETFs, but Stockspot has warned that these funds likely won’t deliver as expected and could cost investors more long-term.
ASIC has released a new regulatory guide for exchange-traded products (ETPs), including ETFs, on the back of significant growth in the market.
