Best and Worst Places for Ethical Companies

Last Updated May 25, 2011 4:04 PM EDT

Which countries get the highest marks for sustainability--for hosting companies that not only make money but have exemplary levels of environmental, governance, and social behavior as well?

To answer that question, George Serafeim and Robert Eccles, both of Harvard Business School, teamed up with Sustainable Asset Management, to examine the state of sustainability reporting in 23 countries. The researchers looked at reporting rules in each country and analyzed SAM's database of 2,255 companies, their reporting, and their financial results. To get a bead on the level of investor interest in sustainability reporting in each country, the researchers turned to Bloomberg. They were able to use data from that company to show how often investors used their Bloomberg terminals to find environmental, social, and governance metrics.

The resulting ranking sorts countries into four categories, based on two criteria:

  • The amount and quality of information that the companies made available
  • How much investors seemed to care about it.
The researchers ranked the countries twice, once for environmental reporting and again for social reporting. Most countries landed in the same category in both rankings, but there were a few differences. These rankings show environmental reporting only. The social rankings are available here.

Most "Sustainable" Countries
In these countries, a high level of investor interest in sustainability information is coupled with reasonably stringent sustainability reports.

  • Denmark
  • U.K.
  • Germany
  • Spain
  • Switzerland
"Sustainable Companies" countries
In these nations, the companies are doing a decent job of sustainability reporting, but investors don't seem to care much. Since the previous research demonstrates that sustainability reporting does have measurable effects on a company's performance, the authors believe there's a need for better investor education in these countries.
  • Brazil
  • Finland
  • France
  • Netherlands
  • South Africa
  • Sweden
"Sustainable investors" countries
These countries have very involved investors, with high levels of interest in the types of performance metrics generated by sustainability reporting. But the companies aren't doing much to satisfy that interest, and there's little regulatory pressure to do so.
  • Canada
  • Greece
  • India
  • Japan
  • Singapore
  • United States
Unsustainable countries
Here, investors aren't inquiring into companies' sustainability efforts or performance, and the companies aren't being proactive in enlightening them, either. Without pressure from either government or investors, earlier research suggests this can lead to a downward spiral where environmental, safety, and governance concerns are pretty easily ignored.
  • Australia
  • Belgium
  • China
  • Hong Kong
  • Italy
  • South Korea
How much does a company's environmental or social behavior matter to you? And are you surprised at where the US is on the list?


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Kimberly Weisul is a writer, editor and editorial consultant. Follow her on twitter at
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    Kimberly Weisul is the co-founder of One Thing New, the free email newsletter for smart, busy women. She was previously Senior Editor at BusinessWeek, responsible for all coverage of entrepreneurship and for launching BusinessWeek SmallBiz, a bimonthly magazine. She is also a freelance writer, editor and editorial consultant.