Covid sets back global sustainable development goals

by | Mar 2, 2023

The Covid pandemic has set back progress on sustainable development goals across the globe, reveals abrdn’s Global Macro ESG Index. Democracy and good governance indicators have also dropped globally over the last decade.

 abrdn’s Research Institute (aRI) has announced the results of its annual Global Macro ESG Index that ranks and scores 135 countries across 20 environmental, social and governance (ESG) indicators, aligned with the UN Sustainable Development Goals, to support investment analysis and decision-making.

It has revealed that: 

  1. After rising consistently over the past decade, since the onset of the Covid pandemic, overall ESG scores globally have now declined for two years in a row. Loss of freedom of movement, a decline in life 13expectancy, employment and social equality have all contributed to the lowered scores. However, environmental scores have seen a slight rebound over 2022, including global carbon emissions intensity – albeit not by enough to comply with the Paris Agreement.
  2. Political and governance (P&G) levels, which capture indicators relating to democracy and governance, have fallen consistently across the globe since the index began in 2012. The world has become less democratic and less well-governed, as greater authoritarianism, populist politics and political repression have taken hold across both the developed and developing world.
  3. Some of the sharpest declines over the past year occurred in Brazil and India, under the leadership of Bolsonaro and Modi. Myanmar, Mali and Afghanistan have also seen sharp declines, whilst Denmark leads the index on P&G followed by Sweden and Finland.
  4. The UK performance has weakened with the deterioration of measures related to freedom of expression and from violence, civil society participation, and civil liberties.
  5. The US continues to underperform and lag its developed peers across many indicators with weak performance on CO2 intensity and growing income inequality. However, over the past year, its P&G scores have improved, likely due to the change of president from Trump to Biden.
  6. China has achieved its highest ESG score yet and is one of the countries that has most improved its environmental and social performance over the past 10 years. However, there is much more work to be done to achieve outcomes more commensurate with its level of economic development, particularly in the environmental and P&G space.
  7. Scandinavian countries continue to lead in every aspect, as has been consistently the case since the index began, with Sweden ahead of Norway and Finland. Nine of the best-performing countries are from Northern and Western Europe. When adjusted for development levels and per capita income, some African countries are on a par with Scandinavian countries, with Malawi and Niger scoring particularly highly.
  8. Overall, in the past year, the biggest ESG improvements have been seen in Moldova, the Dominican Republic and Sudan, while Myanmar, El Salvador and Belarus have seen the most deterioration in scores. Over the 10 years since tracking the index, the most improved countries are Uzbekistan, Senegal and Armenia, while Venezuela, Nicaragua, and Lebanon have seen their scores lower the furthest.

Jeremy Lawson, Chief Economist, abrdn said:

“We created the Global Macro ESG Index to help our investment teams understand the nature of risks and progress at a national level. These can have a profound effect on investment outcomes, even at a company level.

“We are now in the ninth consecutive year of falling democracy and governance, according to the indicators used by our index. Since the onset of the Covid pandemic, all global ESG indicators have declined. It remains to be seen whether the lifting of Covid restrictions and recent regime changes in countries like the US and Brazil will make a difference. It’s interesting to observe that when adjusted for development levels and per capita income, some African countries, such as Malawi and Niger, are scoring on a par with Scandinavian countries.

“One important aim of our Global Macro ESG Index is to grow the understanding of how sustainability-related factors are fundamental for a country’s growth and development. The very specific measures we have used make it easy for investors to see what can be improved and where, as well as what is changing. This includes the way that foreign and domestic conflicts can dramatically alter the risk profile of particular countries, as has been the case with Russia over the past year.”


aRI’s Global Macro ESG Index has been tracking data since 2012 to highlight the sustainable development issues and challenges faced in each country. It pinpoints the progress and how each can be bettered in ways that are appropriate for the individual nation.

Its 20 indicators, which are aligned with the UN’s Sustainable Development Goals (SDGs), are identified as follows:

Environmental – CO2 emissions intensity; air quality; species protection; and, access to clean drinking water.

Social – life expectancy at birth; mortality rate under 5; mean years of schooling; expected years of schooling; gender inequality index; wellbeing ladder index; employment to population ration; and, income inequality.

Governance (& political) – civil society participation; social group equality; freedom of expression and from violence; absence of corruption; clean elections; civil liberties; transparent laws with predictable enforcement; and, access to justice.

A new framework has also been added to help gauge the likelihood of conflicts such as military interventions, human rights abuses and social unrest that could severely affect a country’s investment risk profile. It has highlighted that countries with low ESG scores tend to be at the greatest risk of conflict. That said, many middle-income countries that otherwise fare well in our index also flag concerns. If this monitor had been in place before the war in Ukraine, Russia would have been flagged as a higher ESG-related investment risk than was widely acknowledged.

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