Resetting the ESG Investment Paradigm to Support Emerging Markets & Developing Economies

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). This study 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.

The research report “Resetting the ESG Investment Paradigm to Support Emerging Markets & Developing Economies (EMDEs)” was commissioned by MOBILIST and produced by Fitch Solutions.

The report 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.

The report also presents 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 subsequent MOBILIST “Research Note: ESG Investing Must ‘Do No Harm’ to Developing Countries” provides a succinct summary of the detailed analysis in the report and the policy implications its findings imply. MOBLIST advocates for an ESG paradigm that does no harm to EMDEs and is anchored in their individual and collective interest to maximise capital flows for sustainable development.