Investors Face ESG Risks In Emerging Markets

Monday, 22 March 2010
By Susan Drury

Amongst leading emerging market economies, China, Egypt and Vietnam performed the worst in terms of ESG indicators.

The 2010 version of the EIRIS Country Sustainability Profiles for investors in sovereign wealth bonds includes a comparison of those emerging market countries that will play a key role in driving global economic development over the coming decades - Brazil, China, Egypt, India, Indonesia, Mexico, Pakistan, Philippines, Russia, South Korea, Turkey and Vietnam.

The three best performers were South Korea, Brazil and Mexico. Both Mexico and Brazil scored higher on environmental indicators than Canada and the USA, showing it is possible for emerging markets to experience rapid growth and to mitigate ESG risks.

Of all 68 countries surveyed on the 49 ESG indicators, the three best perfromers were Sweden, Austria and Switzerland.

"The poor performance of China, particularly in the area of governance but also scoring low on environmental indicators, should be of particular concern to investors given that its economy is due to overtake the USA's as the world's largest over the next 20 years," commented Carlota Garcia-Manas, Co-Head of Research at EIRIS.

For more information visit: www.eiris.org

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