ESG Is a Work in Progress for Emerging Markets

As the United Nations convenes its annual Climate Week, emerging-market investors are again sitting through endless symposia on the contrived trio of environment, social, and governance topics interwoven with the 2030 Sustainable Development Goals. They will realize, in a nod to asset-class origins, that a catchall category like ESG is in part a marketing slogan, with the actual allocation approach judged by good faith presumption and concrete rationale.

The category “emerging markets” began 40 years ago as an experimental World Bank stock fund label before morphing into a far-flung capital markets complex. By the same token, ESG was first associated with the U.N.’s Principles for Responsible Investment and the Global Compact, before spawning a cottage industry of voluntary industry-government frameworks and data providers.

Published by Gary Kleiman in Barron’s.