Sustainable Investment Assests Under EM Managers on the Rise

In the world of emerging market funds, this week brought more positive news. A study released the other day by the global consulting firm Mercer and commissioned by IFC reveals that sustainable investment assets undermanagement in emerging markets have grown to over $300 billion, almost 10 percent of total investment in emerging markets last year alone.

More encouraging still is the fact that emerging market fund managers are increasingly considering environmental, social and corporate governance (ESG) factors in their investment decisions.

Several notable key trends from the survey include:

• Sustainable investment is a growth story in emerging markets
• Global investment managers who invest in EME products lead ESG investing
• Corporate governance is a well-understood concept in major emerging markets
• The environment and climate change are on the radar
• Social issues are best addressed by local emerging market managers
• ESG awareness as a risk management tool

(Source: "Gaining ground: Integrating environmental, social and governance (ESG) factors into investment processes in emerging markets," Mercer and IFC, March 2009)

This latest survey illustrates the reality that fund management in emerging markets is becoming increasingly more stable, dependable and sustainable.