Resetting the ESG Investment Paradigm to Support Emerging Markets & Developing Economies (EMDEs)
The mainstreaming of environmental, social, and governance (ESG) considerations is increasingly shaping the flow of capital to and among emerging markets and developing economies (EMDEs). A new report commissioned by MOBILIST and presented by Fitch Solutions assesses the nature and extent of this influence and documents how EMDEs are responding to shape the ESG paradigm to their specific objectives and market context. It also develops a set of recommendations to ensure any risks of capital diversion are mitigated, and to ensure that EMDE perspectives are well-represented in the global ESG debate.
The research combines a secondary evidence review with original data analysis and expert interviews with market participants. The purpose of this consultation was to hear practitioners’ views on the impact of current ESG mainstreaming on capital allocation in EMDEs and to identify how EMDE policymakers, regulators, issuers, investors and intermediaries are responding. Representation across EMDEs in terms of geography and market development was central to the study, including interviews with experts experienced in markets such as Brazil, India, Kenya, Morocco, Pakistan, South Africa, Thailand and Uruguay.
On February 21st, MOBILIST and Fitch Solutions held a webinar to present the main findings the report, opening out to a panel discussion in which a group of selected panellists brought their expertise and perspectives to a discussion around the topic of ESG investment in EMDEs. Find out more about the event here.
The panel was moderated by Simon Mundy from the Financial Times, and featured the following speakers.
- Esther Law, Senior Investment Manager, Emerging Markets, Amundi Asset Management
- Robert Patalano, Head of Financial Markets Division, OECD
- Hind Chawki, Head of ESG, Global Credit Markets and Head of Financial Markets, MENA & Pakistan, Standard Chartered Bank
- Harsh Singhal, Founding Partner, Edhina Capital, India
- Michelle Karavias, Global Head of Industry Research, Fitch Solutions
In these video excerpts from the event, Michelle Karavias explains how challenges surrounding ESG data and market regulations can exacerbate capital diversion from EMDEs.
In this video excerpt, Robert Patalano, explains that bias in ESG ratings means that low- to middle-income countries will always receive lower ESG scores.
Click here to read the full report.