Ethical Performance
inside intelligence for responsible business


spotlight falls on emerging markets

January 2008

The World Bank's private sector arm has commissioned what it says will be the first comprehensive review of the state of socially responsible investment in emerging markets.

The International Finance Corporation has appointed the investment consultancy Mercer to conduct in-depth research on 'how prevalent environmental, social and corporate governance factors are in emerging market investments'.

The corporation hopes the results of the year-long study will make it easier for institutional investors to find fund managers with SRI expertise in emerging markets. The results will include a list of the fund managers who take some kind of SRI approach, showing the degree to which they consider environmental and social factors when making investment decisions. An increasing number of SRI funds now invest in this asset class. Last year ABN Amro's Brazil Equity fund became the first to exclusively target emerging markets.

Cecilia Bjerborn, IFC project manager, said there was a 'surging' demand for SRI fund managers with expertise in emerging markets, yet a recent IFC study had found that 65 per cent of asset owners were unable to find such managers.

Helga Birgden, Mercer's head of responsible investment for Asia Pacific, said she hoped the survey would 'send a message to emerging markets that this integration is both important and relevant'. The research will be carried out by Mercer's 11-strong responsible investment business unit. The IFC commissioned the work because one of its aims is to foster sustainable growth in developing countries through private sector investment.

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