As more politicians become aware of the need to do something about climate change before we’re all swallowed by the oceans we came from, discussions are focusing on how to measure what countries are doing about it and what steps to take to contain it.
An accounting trick that could save the planet should perhaps be given more attention: adjusting each country’s gross domestic product data by the effect that particular country has on climate change.
Continue readingAmong developed countries investors, there are various interpretations of the strength of the commitment to environmental, social and governance (ESG) factors in emerging markets, ranging from the cynical to the idealistic.
The cynical view would be that there can be no “real” ESG in emerging markets because too often they are plagued by corruption, therefore investors cannot trust what companies in these countries report.
The idealistic view, on the other hand, would see every little step towards introducing ESG as a wonderful sign that these countries are finally deciding to adopt the same values as Western democracies.
While both extremes are wrong, sadly even the moderate take misses the main difference between emerging markets and developed ones: the effect of development itself on ESG — and in particular on the “E”.