Research by the Ethical Investment Research Service (Eiris) has showed that amongst leading emerging market economies, China, Egypt and Vietnam perform the worst in terms of Environmental, Social and Governance (ESG) indicators.
The Eiris Country Sustainability Profiles for investors in sovereign wealth bonds includes a comparison of those countries expected to play a key role in driving global economic development over the decades ahead.
The countries analysed for the comparison were Brazil, China, Egypt, India, Indonesia, Mexico, Pakistan, Philippines, Russia, South Korea, Turkey and Vietnam, with the three best performing countries Brazil, Mexico and South Korea. Both Brazil and Mexico scored higher on environmental indicators than Canada and the United States, showing that emerging markets can mitigate ESG risks as well as experience rapid growth.
China worries investors
Co-head of Research at Eiris, Carlota Garcia-Manas, said: ‘The poor performance of China, particularly in the area of governance, but also scoring low on environmental indicators, should be of particular concern to investors given that its economy is due to overtake the USA’s as the world’s largest over the next 20 years.’
Of all 68 countries surveyed on the 49 ESG indicators the three best performers were Sweden, Austria and Switzerland.
For much more information on ethical investments and expert views on choosing an ethical fund, check out our brand new guide to ethical investing.
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