New Delhi:The International Finance Corporation (IFC), the private sector branch of the World Bank Group, has appointed Mercer to undertake the first in-depth research on the prevalence of the integration of environmental, social and corporate governance (ESG) factors in emerging market investments.
Specifically, Mercer will survey fund managers operating in emerging markets, including India to identify and highlight those that incorporate ESG factors in their investment processes.
The research aims to facilitate investments in sustainability-conscious emerging market funds and to signal to fund managers the growing worldwide demand for sustainable investment products. The survey will include a list of fund managers identified and information on their capacity to integrate ESG factors.
The survey results will be made publicly available and communicated to investment communities throughout the major developed and emerging markets on completion of the project.
Mercer’s head of Responsible Investment for Asia Pacific, Helga Birgden, said, “The survey will enable Mercer to integrate ESG analysis within fundamental manager research, sending a message to the market that this integration is both important and relevant. We are proud to partner with IFC, and looking forward to the opportunity to provide institutional investors ESG research on emerging market managers”.
Cecilia Bjerborn, IFC project manager said, “While investments in emerging markets are surging, so is the demand for fund managers capable of incorporating ESG factors into their emerging market investments. However, an Economist Intelligence Unit study, commissioned by IFC, shows that 65% of asset owners are not able to find such investment managers.
“We expect that this survey will provide asset owners with a greater understanding of the trends and competitive forces around ESG factors in emerging markets. We are very pleased to be working with Mercer, a proven leader in responsible investment,” she said.
The project will run for approximately 12 months and has three major components. Firstly, Mercer will undertake a global survey of equity managers operating in emerging markets, including those based in developed countries, to review their approaches to ESG factors.
The second component will consist of an in-depth review of mainstream equity managers in India, Brazil, China and South Korea to assess the extent to which they are currently assessing ESG risks or opportunities.
The project will also assess the range of “sustainable investment” branded funds that now offer emerging market products, and the total assets that these funds have garnered to date.