Compared to developed markets, ESG investing in emerging markets is most likely characterized by lower transferability of approaches and principles methods from developed markets.
Market Differences: Emerging markets often have different regulatory environments, cultural contexts, and levels of market development compared to developed markets. These differences can affect how ESG principles and methodologies are applied.
Transferability Issues: The approaches and principles developed in more mature markets may not always be directly applicable in emerging markets. Factors such as differing levels of corporate governance, environmental regulations, and social norms require adaptations to ESG strategies.
Customization Needed: Investors in emerging markets need to tailor their ESG approaches to the local context to effectively address the unique challenges and opportunities present in these markets.
CFA ESG Investing References:
The CFA Institute’s resources on global ESG investing emphasize the importance of understanding local contexts and adapting strategies accordingly. This is particularly relevant in emerging markets, where direct transferability of developed market principles may not be effective.
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