It was announced 22 June 2009 that seven out of ten major asset managers and institutional investors, collectively representing US$130 billion of emerging market investments, cited lack of environmental, social and corporate governance (ESG) disclosure as the key challenge to investing in emerging markets. That is the main finding of a new survey from the Emerging Markets Disclosure (EMD) Project, an international coalition of investors and organizations working to improve sustainability disclosure by companies in emerging markets. The survey was analyzed by EIRIS and sponsored by the International Working Group of the Social Investment Forum, which provided organizational support for the project.
The survey shows that at a time when increasing numbers of institutional investors are demanding more openness and transparency, poor ESG disclosure by emerging market companies threatens to undermine investor confidence and could potentially reduce investment allocations to emerging markets.
Survey respondents commended two emerging market countries - Brazil and South Africa - for having made the most progress towards greater ESG disclosure. Both countries have developed a sustainability index to which their listed companies can aspire through improved disclosure.
Find out more about the results of the survey here.