Global sustainability indexes have delivered a range of performance outcomes in 2025, according to new analysis from Morningstar Indexes based on its suite of global sustainability indexes.
In an environment of heightened market volatility and widespread uncertainty, which has seen the Morningstar US Market Index dip by 14% and the Morningstar Global Markets Index decline by 11%, the Morningstar Global Markets Sustainability Index has lost less than the broad global equity market, with a decline of just over 10%. The Morningstar Developed Markets Paris Aligned Benchmark (PAB) and Morningstar Global Low Carbon Transition Leaders Indexes, on the other hand, have both lost more than the broad market, declining 13% and 12%, respectively, in 2025.
Morningstar Index experts attribute the ability of the Morningstar Global Sustainability Index to better weather the current market storm to its underlying methodology.
Thomas Kuh, PhD, Head of ESG Strategy – Morningstar Indexes
“Not all ESG indexes are created equally. Different objectives lead to different methodologies and, potentially, different outcomes for the end investor. The Morningstar Global Sustainability Index is designed to offer broad market exposure with lower relative ESG risk than the broad market. Stock selection in communication services and consumer cyclicals has helped its year-to-date performance relative to the market benchmark.”
Kuh goes on to describe that the Morningstar Global Sustainability Index has lower downside capture ratio and higher upside capture ratio than the broad market. This means the index has a propensity to lose less in times of market stress and gain more in times of market growth.
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