Emerging markets are at the coalface of environmental, social, and governance risks, yet ESG investments in them aren't natural outperformers, Vontobel's Lara Kesterton says in a finews.tv interview.
For increasingly popular ESG investments, emerging market companies run counter to the common narrative of strong outperformance, Lara Kesterton, head mtx ESG Research at Vontobel, says in a finews.tv interview. The markets are more exposed to ESG risks, and company managements in emerging markets differ vastly in their handling of them, she notes.
«This leaves opportunities for active ESG managers to do their proper homework and analysis to identify laggards which are underperforming or not able to manage those risks,» she adds.
The «G»-factor – governance – may be the most important pillar in ESG, in emerging markets firms in particular, she notes: because board independence tends to be lower than in developed markets, stocks require extra attention on issues like skillset, diversity, expertise, or track record of protecting the interests of minority shareholders.
Click here to view the complete video with ESG research head Lara Kesterton.
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