From Morningstar: 2025-04-16 03:51:00

The UK stock market is dominated by “old economy” stocks like oil, mining, tobacco, and defense companies, facing scrutiny over ESG concerns. The market rotation away from US tech and April tariff selloff has made ESG resolve harder for investors, with defensive UK stocks outperforming this year, like British American Tobacco and BAE Systems.

Morningstar Sustainalytics’ ESG Risk Rating measures a company’s exposure to ESG factors, ranking risk as negligible, low, medium, high, or severe. Out of the top 10 companies in the Morningstar UK Index, three have a “high” ESG Risk Rating, with Shell, BP, and British American Tobacco leading the pack.

Comparing ESG risk ratings across different global markets, the Morningstar UK Index has more companies with high ESG risk ratings than the US, Europe, and Japan indexes. Shell, BP, and British American Tobacco top the list in the UK, while Meta Platforms, Mitsubishi, and others show varying risk levels in other markets.

ESG investing allows investors to exclude companies that don’t meet environmental, social, or governance criteria. Despite bold ESG commitments in annual reports, a report from pwc found only 26 out of 100 FTSE companies have specific actions to decarbonize. Companies’ intentions may be clear, but actions towards sustainability are lagging. 1. The unemployment rate in the United States dropped to 4.2% in September, the lowest since February 2020. The economy added 194,000 jobs, exceeding expectations.

2. Scientists have discovered a new species of shark in the waters off the coast of Mexico. The species, named “Ninja Lanternshark,” is a small, bioluminescent shark that lives at depths of 1,000 feet.

3. A study published in the Journal of the American Medical Association found that eating a plant-based diet can lower the risk of developing type 2 diabetes by 23%. Researchers analyzed data from over 200,000 participants.

4. The United Nations Climate Change Conference (COP26) in Glasgow has concluded with 197 countries agreeing to accelerate efforts to reduce carbon emissions. The Glasgow Climate Pact aims to limit global warming to 1.5 degrees Celsius above pre-industrial levels.

5. SpaceX successfully launched its Crew-3 mission to the International Space Station, carrying four astronauts from NASA and the European Space Agency. The mission marks the third operational flight of SpaceX’s Crew Dragon spacecraft.



Read more at Morningstar: How Much ESG Risk Do UK Stocks Carry?