ESG in emerging markets is like the famous ice tunnel you have to navigate on your ascent of Mount Everest. It is steep and treacherous and its permafrost hides some of those who were unsuccessful. But training, hard work and sheer perseverance may pave the way to mountaineering glory.
We believe that ESG offers risks and opportunities in equal measure. Material ESG issues will impact the sustainable profitability of a company and, critically, it is the direction of change that matters most. Is the company's performance in certain key environmental, social or governance issues deteriorating or improving? It is the focus on ESG improvers that broadens the opportunity set from ESG as a risk management tool to source of alpha generation. Let's start with the risks. ESG risks are far reaching: spanning environmental challenges such as extreme weather events, water c...
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