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Investment Experts Stress Importance of Emerging Markets

(New York, 29 October 2007) - Pressures will intensify in the coming years for the proper consideration of environmental, social and governance issues ("ESG") in investment decisions related to emerging markets, according to a study released today.
 
Published by the UN Global Compact, the Swiss Government, and the International Finance Corporation, "Who Cares Wins: New Frontiers in Emerging Markets Investment" presents the views and perspectives of more than 70 investment professionals who gathered on 5 July in Geneva for the third annual Who Cares Wins conference.
 
Among the key findings:

  • In many instances the investment case for considering ESG issues in emerging market investments is stronger than the case related to developed markets.
  • Macro-economic growth rates in emerging markets are often impacted by ESG issues such as political stability, governance, corruption, education and public health.
  • A relative lack of oversight by regulators and gatekeepers such as analysts and institutional investors results in weaker investor protection and ultimately higher agency costs.
  • Asset owners are increasingly demanding a more explicit consideration of ESG issues in emerging market investments.
  • There is a time limit attached to different ESG issues: in the short term, the importance of social and governance issues tends to be underestimated; in the long term, the importance of environmental considerations is expected to come to the fore.

"Our hope is that the many insights contained in this report, combined with other learnings from the Who Cares Wins initiative, will lead to a better consideration of ESG issues and therefore to stronger and more resilient capital and investment markets", said Gavin Power, Head of Financial Markets, UN Global Compact.
 
To access New Frontiers in Emerging Markets Investment, please click here.

Contact

Gavin Power
Head of Financial Markets
powerg@un.org