Tread carefully: Ignoring social issues in emerging markets will harm investors

Deep Dive into ESG in emerging markets

Focusing on ESG is crucial for all investors looking to allocate to emerging markets.

While ESG is clearly important in most asset classes, there are many idiosyncrasies within EM countries that mean a failure to effectively consider environmental, social and governance factors could have particularly meaningful consequences.  Governance  Governance standards have long been an issue in emerging markets.  Peculiar legal structures mean it is not always clear what shareholders actually own. Corruption is more common, while confidence in legal and regulatory institutions is weaker. EM companies are much more likely to have a controlling shareholder (or group of share...