UK stocks carry heavier ESG risks than global peers

UK stocks have long been dominated by companies from energy, mining, tobacco and defence — sectors often subject to heightened environmental, social and governance (ESG) scrutiny. But how does the ESG risk profile of the UK’s market leaders stack up against their peers in the US, Europe and Japan? Morningstar Sustainalytics data shows that out of the 10 largest companies in the Morningstar UK Index, three carry a “high” ESG Risk Rating — more than any of the other major regional indices. Shell, BP and British American Tobacco all feature prominently, while other markets’ biggest names carry...