Many investors balk at the idea of using environmental, social and governance (ESG) criteria when investing in emerging markets (EM). Pictures of wood-burning stoves polluting tropical air or military tanks in a coup d’etat are often the associations one has with emerging markets and run counter to the growing need for environmental sustainability and good governance.
Just a decade ago, most countries facing fragile situations (whether political, social or economic) were low-income. This situation has hugely improved, with human development indices and other metrics demonstrating significant progress as many countries have graduated to middle income status. If we look ahead, some of the poorest countries with the lowest ESG scores may in fact produce the largest improvements.
Combining the expertise of our Emerging Markets Fixed Income team and our dedicated Sustainability Centre, our ESG in emerging market debt (EMD) report explores:
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