Stable earnings derived from agreeable concessions in projects
In the dynamic landscape of emerging markets, investors are faced with a myriad of challenges as they strive to make a positive impact while securing returns. The traditional model of public expenditure alone cannot bridge the substantial funding gap in developing countries, necessitating the role of private capital [1].
Social media, a double-edged sword, offers a platform for connection and the thriving of millions of small businesses, yet it also breeds toxicity and raises concerns over personal data protection [2]. The same can be said for industries such as video games, renewable energy, and social media, each with their controversial aspects and potential benefits.
Emerging economies, however, offer long-term benefits for investors. These markets are expected to experience sustained, robust growth in the coming decades, driven by urbanization and demographic trends [3]. Investors in these markets benefit from structural changes, including demographic shifts, the increasing importance of technology, and consumption [4].
One of the significant challenges faced by sustainably-oriented investors in emerging markets is the presence of macroeconomic vulnerabilities, slow economic growth, rising debt, and demographic pressures [1]. These factors constrain investment capacity and returns in emerging markets and developing economies (EMDEs).
Climate risks and environmental vulnerabilities are another challenge, with EMDEs being disproportionately exposed to climate change impacts [1]. These require large adaptation and mitigation investments that are complex and costly.
Limited access to customized financing and capital, political and regulatory uncertainty, data gaps, and integration issues further complicate the investment landscape in emerging markets [1][5].
However, constructive engagement through stewardship can help address these challenges. By facilitating ongoing dialogue with investee companies, promoting transparency and accountability, and tailoring engagement to asset classes and relationships, investors can mitigate risks related to ESG factors, influence better corporate behavior, and help mobilize and direct capital effectively [2].
For an effective, long-term investment strategy, it's crucial to focus on companies with sustainable earnings potential that are currently undervalued by the market. By leveraging our intensive relationships and global expertise, we create value through constructive engagement, ensuring portfolio growth is sustainable without impairing the interests of other stakeholders.
In conclusion, while emerging markets pose challenges for sustainably-oriented investors, the potential for growth and positive impact is significant. By embracing stewardship and constructive engagement, investors can navigate these challenges and make a difference in the world.
[1] World Bank Group. (n.d.). Emerging Markets and Developing Economies (EMDEs). Retrieved from https://www.worldbank.org/en/topic/emde
[2] Investment Association. (2019). Stewardship Code 2019. Retrieved from https://www.theia.org/-/media/files/resources/publications/stewardship-code-2019/stewardship-code-2019.pdf
[3] United Nations Development Programme. (n.d.). Emerging and Developing Economies. Retrieved from https://www.undp.org/content/undp/en/home/ourwork/economic-development/emerging-and-developing-economies.html
[4] International Monetary Fund. (n.d.). Emerging Markets. Retrieved from https://www.imf.org/external/pubs/ft/weo/2019/02/weodata/weorept/emerging.aspx
[5] Organisation for Economic Co-operation and Development. (n.d.). Emerging Economies. Retrieved from https://www.oecd.org/countries/emerging-economies/
- In the realm of environmental science, the consequences of climate-change are particularly alarming for emerging markets and developing economies (EMDEs), as these regions are disproportionately exposed to its impacts.
- The science of climate-change and its impacts on the environment necessitate substantial adaptation and mitigation investments, a challenge for EMDEs due to their limited access to customized financing and capital.
- To secure returns while making a positive impact, investors delve into the fields of finance, technology, and sustainable-living, considering opportunities in diverse industries such as renewable energy or environmental-science-based businesses.
- As investors seek long-term benefits in emerging markets, they must be aware of the presence of macroeconomic vulnerabilities, slow economic growth, and rising debt that affect investment capacity and returns in these markets.
- A profitable, sustainable lifestyle can also be pursued through personal growth and education in areas such as finance, business, and education-and-self-development, empowering individuals to make responsible decisions in their home-and-garden and consumption habits.
- To navigate the challenges in emerging markets and secure returns, investors and businesses must engage in constructive dialogue, advocating for transparency, accountability, and stewardship, as highlighted by the Investment Association's Stewardship Code 2019.
