The report, carried out by Swiss investment group RobecoSAM, measured 59 countries, including 38 from emerging markets and 21 developed nations, on a wide range of factors including environmental, social, and governance.
Australia ranked second in the report, with Sweden's neighbours Denmark, Norway, and Finland all placing inside the top ten.
The ratings, according to RobecoSAM, offer insights into the investment risks and opportunities associated with each country, and allow investors to compare countries to each other.
Sweden earned high scores across almost all criteria, scoring particularly well on environmental factors such as the use of renewable energy sources and low CO2 emissions.
Sweden also rated highly in labour participation, education and income inequality, with further strengths in the governance dimension, including the top score for its institutional framework.
RobecoSAM is an investment specialist focused exclusively on sustainability investing, and is based in Zurich, Switzerland.
The top ten sustainable countries