On September 14, 2020 Pinebridge Investments published an infographic dispelling five myths about ESG in emerging markets.
“Emerging markets often face a ‘perception shortfall’ compared with developed markets when it comes to environmental, social, and governance (ESG) factors. The truth is emerging markets are driving global economic growth, and ESG factors have never been more important to investors looking to harness this growth. Many investors, however, cling to some false notions concerning ESG in EM that keep them from realizing the sector’s potential.
Here, we dispel five myths about ESG in EM.
Myth 1: ESG risks are higher in emerging markets (EM) than in developed markets (DM).
Fact: DM companies face the same spectrum of ESG risks as their EM counterparts.
Myth 2: ESG data in EM is lacking.
Fact: EM data related to ESG does exist, but EM is hugely underrepresented in investment terms, leading to a perceived lack of data.
Myth 3: Markets do not price in ESG factors in EM.
Fact: ESG factors are very much priced in.
Myth 4: ESG in EM does not help investment returns.
Fact: ESG can have a positive impact on investment returns.
Myth 5: Green bonds are key to ESG investment in EM
Fact: Not yet. Although issuance is growing fast, green bonds are insignificant today.”
You may read the infographic on the Pinebridge internet site.