Europe Leads Global Sustainability Ratings

by | Nov 29, 2022

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Sustainability Index

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European countries are highly ranked in a sustainability model that measures how nations are doing in terms of green development, and there was some overall growth internationally that shows potential for further progress — but large nations such as the United States and China did not fare well.

The Global Sustainable Competitiveness Index (GSCI) measures growth across six categories, including resource efficiency, natural capital, and governance performance. All but two of the top 20 performing countries are in Europe, with Sweden topping the list.

The GSCI is published by sustainable management consultancy SolAbility and was first released in 2012. It uses data from international sources, such as the United Nations, World Bank, and International Monetary Fund. SolAbility says sustainable competitiveness “is the ability to generate and sustain inclusive wealth without diminishing the future capability of sustaining or increasing current wealth levels.”

Overall, the GSCI showed positive results in 53% of its measurable data points.

The United States and China ranked 30th and 31st, respectively, but both scored fairly low in resource efficiency, which includes energy, water, and raw material management. The US scored 80th in that category, which analyzed use in areas like fossil fuels and renewable energy.

The US has put a priority on energy transitions to reach emissions reduction goals, and recent regulations in the Bipartisan Infrastructure Law and the Inflation Reduction Act have attempted to boost domestic production and manufacturing of energy sources. The Energy Information Administration says through September 2022 renewable sources such as wind and solar have produced 23% of the country’s electricity.

China ranked 154th in resource efficiency, especially due to the significant presence of heavy industries. The United Kingdom scored the highest in resources, and Europe, which has been tackling an energy crisis with conservation measures and relief efforts, made up half of the top 10 in the category.

Natural capital was an area where results declined, and the report estimates the trend will continue. The report says natural capital numbers declined in 60% of indicators.

The topic measures a country’s ability to be self-sustaining through land, water, biodiversity, food production, and energy and mineral resources. South America scored the best in natural capital, especially with a large biodiversity pool, with Columbia and Brazil ranking the highest.

A 2021 report by S&P Global Ratings found that natural capital is a missed opportunity in many industries and could be costing companies and countries billions in losses. Brazil is one of the first countries to pass legislation requiring an annual valuation of its natural capital.

Governance measured progress in areas such as infrastructure and financial regulations. South Korea ranked first, followed by Switzerland and Denmark. Despite efforts such as the infrastructure law and the Security and Exchange Commission’s proposed emissions disclosure rules, the US ranked 51st.

The GSCI ranked 180 nations, and the global average was a score of 44 out of 100. The index also ranked countries based on economic sustainability, intellectual capital, and social capital.

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