Net Zero Sovereign Index: annual insights, 2023

For the first time since the launch of our Net Zero Sovereign Index, the top 10 countries are all emerging markets.

31 Jan 2024

3 minutes

Peter Eerdmans
Nicolas Jaquier
Roger Mark

The fast view

  • For the first time since the launch of the index, the top 10 countries are all emerging markets.
  • Costa Rica moved into the highest net-zero alignment category in the index, reflecting impressive progress on a variety of fronts.
  • Sub-Saharan African countries continue to be well represented at the top of the rankings given low emissions per capita and encouraging renewable energy trends in some countries (e.g., Kenya).
  • Portugal’s score improved sufficiently for it to move up to the ‘high-alignment’ category, thanks to impressive recent trends in renewable energy. But some European countries saw their index rankings fall due to an increase in energy subsidies.
  • Large oil-producing nations continue to dominate the lowest ranks of the index. However, accelerating renewable investment trends in a number of these are becoming increasingly clear.

About the Net Zero Sovereign Index

In 2021 we created the Ninety One Net Zero Sovereign Index. Our aim was to take a first step in addressing a growing need among asset owners and managers – providing a means of assessing the extent to which sovereign bond markets are on a credible path to achieving net-zero carbon emissions and of measuring the degree to which sovereign bond portfolios are aligned with global transition goals. The index adheres to the Common But Differentiated Responsibilities principle, which was a critical component of the Paris Agreement, aiming to build fairness into net-zero assessments.

Reflecting our emerging market (EM) focus, we purposefully included the widest available investment universe; comprising 117* countries, the index covers a much larger universe than typical third-party alternatives.

Given the importance of measuring a country’s outright progress towards achieving net zero by 2050, we decided to enhance our methodology and adopt an absolute measure of alignment in our 2022 Net Zero Sovereign Index. We believe this enhanced index provides asset owners and investment managers with greater capacity to support a fair transition for EMs and will help sovereign-debt investors hold governments to account for their climate policies and actions.

For further information, please see the following pieces: Net zero: no one left behind and EM sovereign debt: on track for net zero?

Net Zero Sovereign Index – key findings in 2023

At the overall index level, the majority of countries show a medium level of alignment to global net-zero goals.

Source: Ninety One, as at 31 December 2023. The categories in the above chart – very high (best), medium, low and very low (worst) - are determined by weighting each of the six sub indices to arrive at an overall score.

Evolution of the index

We are committed to evolving the Net Zero Sovereign Index, which is an important component of our sustainability framework. In addition to augmenting the Index to show how each country is performing in an absolute sense from a ‘Paris alignment’ perspective, as noted above, other enhancements include: the use of a smoothed metric in recognition of volatility in emissions and energy data; tweaks to the forestation metric to capture both absolute and relative forest loss. We apply these enhancements to historical index scores to ensure that year-on-year comparisons are based on a level playing field.


For the first time since the launch of the Index, the top 10 countries are all emerging markets. That’s perhaps unsurprising as the momentum in climate policies, net-zero commitments and energy transition gathers pace, particularly in emerging markets.

Costa Rica moved into the highest net-zero alignment category in the index, reflecting impressive progress on a variety of fronts. Continued positive trends attest to the country’s sustained effort towards decarbonising its economy. Costa Rica stands out thanks to a high level of green policy alignment and strong emissions-reduction commitments.

Second-place Albania faced some downgrades to its score. Elsewhere, Sub-Saharan African countries continue to be well represented at the top of the rankings given low levels of emissions per capita and in some countries – most notably Kenya – very encouraging renewable energy trends.

The UK, Denmark and Switzerland remain the highest scoring developed countries – all making the top 25. Portugal – which has seen some impressive renewable trends of late – was the biggest improver among developed markets. However, some European countries such as Germany saw their index ranking fall due to higher energy subsidies mentioned earlier.

The lowest ranks of the index continue to be dominated by large oil producers, with the US being downgraded to a ‘very low’ alignment, joining countries such as Russia and members of the Gulf Cooperation Council. Accelerating renewable investment trends in countries including UAE and South Korea are increasingly clear in the numbers which should help to catalyse improving net-zero alignment over time.

All information in this report is based on the Net Zero Sovereign Index as at 31 December 2023; the date of the underlying input data used in index calculations will vary – it is the latest available at the time, and the index will be updated in line with appropriate data revisions.

Table 1. Net Zero Sovereign Index – Top 10

Rank Country Alignment Emissions Energy usage Renewables Pathways Land use Policy
1 Costa Rica Very High Very High Very High Very High High High High
2 Albania High High Very High Very High Very High Very High Very Low
3 Kyrgyzstan High Very High Very High Very High Very High Medium Very Low
4 Ecuador High High Very High Very High Very High High Very Low
5 Jordan High Very High Very High High Very High Medium Very Low
6 Angola High Very High Very High High Very High Very Low Very Low
7 Mozambique High Very High Very High Very High High Very Low Very Low
8 Kenya High Medium High Very High Very High High Medium
9 Ethiopia High Medium Very High Very High Very High High Very Low
10 Uganda High Medium High Very High Very High High Medium

Source: Ninety One, 31 December 2023. For illustrative purposes only. Please note that Venezuela is assessed within Ninety One's Net Zero Index but has been removed from the rankings due to insufficient data quality. Full index ranking available on request.

An important point to note is that macro developments drove some of the key score changes relative to a year ago. The impact of COVID lockdowns continues to skew the data somewhat, particularly in high-income countries where sharp economic slowdowns led to a significant drop in emissions and energy intensity. This is expected to turn as more recent data becomes available. Some of the more extreme improvements were also not necessarily a reflection of positive dynamics – in particular, economic depressions in Lebanon and Sri Lanka led to sizeable improvements in their net-zero alignment scores. In the opposite direction, the rise in gas prices since Russia’s invasion of Ukraine has led to a rise in energy subsidies in some markets, resulting in worsening policy scores in the index.

Table 2. Selected country alignment scores and change from previous year

Rank Country Alignment 2023 Alignment 2022
1 Costa Rica Very High High
2 Albania High Very High
20 Nicaragua High Medium
25 Portugal High Medium
29 Togo High Medium
31 Tajikistan High Medium
33 Georgia High Medium
34 Estonia High Medium
36 Romania High Medium
40 Guatemala Medium High
41 Paraguay Medium High
42 Spain Medium High
48 Uruguay Medium High
71 Lebanon Medium Low
73 Japan Medium Low
74 Slovenia Medium Low
77 Uzbekistan Medium Low
82 Australia Medium Low
101 Kazakhstan Low Very Low
106 USA Very Low Low

Source: Ninety One, 31 December 2023. For illustrative purposes only. Please note that Venezuela is assessed within Ninety One's Net Zero Index but has been removed from the rankings due to insufficient data quality. Full index ranking available on request.


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* This includes Venezuela, however, it has been removed from the rankings due to insufficient data quality.

Specific risks. Emerging market (inc. China): These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems.

General risks. The value of investments, and any income generated from them, can fall as well as rise. Where charges are taken from capital, this may constrain future growth. Past performance is not a reliable indicator of future results. If any currency differs from the investor's home currency, returns may increase or decrease as a result of currency fluctuations. Investment objectives and performance targets are subject to change and may not necessarily be achieved, losses may be made. Environmental, social or governance related risk events or factors, if they occur, could cause a negative impact on the value of investments.

Authored by

Peter Eerdmans
Nicolas Jaquier
Roger Mark

Emerging Perspectives - latest insights

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All the information in is believed to be reliable but may be inaccurate or incomplete. The views are those of the contributor at the time of publication and do not necessary reflect those of Ninety One.

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