ESG and emerging markets: Five myths to ignore

Environmental, social and governance considerations increasingly important in EM

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PineBridge Investments' John Bates
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PineBridge Investments' John Bates

The consideration of environmental, social, and governance (ESG) factors is an essential component of any rational investment strategy, and emerging markets (EM) have become an essential component of many investors' portfolios.

However, when ESG meets EM, some false notions tend to arise among investors. Here, I have dispelled five of the biggest myths I have encountered.  Myth one: ESG risks are higher in EM than in developed markets (DM) History shows us the most momentous cases of ESG failure occur because of human shortfalls, caused mostly by poor management decisions and, in many cases, a desire to maximise profits. Of course, a colossal gap stretches between the strong and the weak credits in both EM and DM, but the best-run companies in EM are also among the best-run in the world. A high proporti...

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