ESG Investing in Emerging Markets

With governance issues and lighter regulation, emerging markets throw up challenges for ESG investors

Andrew Willis 8 October, 2019 | 1:24PM

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Emerging markets are more volatile than developed markets and are also riskier. However, they are a growing and significant part of global markets and now represent more than 10% of global equity indices. A growing share of the world’s population lives in emerging market countries, with China and India alone making up more than a third. These countries also have a younger workforce with a growing middle class and a consumer base that is getting wealthier.

It is a fact that opportunities abound in these markets, and but they are also often opaque and difficult to navigate. Investors approaching emerging markets face differences in technology, culture and regulatory environments. So why would you want to add another layer of complexity by incorporating ESG (environmental, social and governance) factors too?

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About Author

Andrew Willis  Andrew Willis is a content analyst at Morningstar Canada 

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