The Future Investment Initiative Institute (FII Institute), a global non-profit foundation dedicated to tackling global challenges, has introduced a new tool with the potential to help reduce the US$5.4-trillion ESG investment gap in emerging markets.
ESG investing has grown exponentially in recent years, reaching USD $38 trillion globally, but emerging markets still attract less than 10% of ESG funds despite their 58% contribution to global GDP.
FII Institute interviewed top investors who cited ESG rating agencies as a major barrier due to irrelevant KPIs.
In response, FII Institute teamed up with EY to launch the Inclusive ESG Framework in 2022 and collaborated with ESG Book to create the Inclusive ESG Score and Tool launched at FII7, unlocking new opportunities for investors interested in emerging markets.
For Investors:
The Inclusive ESG Score identifies ESG-focused companies, guiding the Inclusive ESG Ranking of the Top 250 sustainable emerging market companies for investment consideration.
For Emerging Market Companies:
The Inclusive ESG Tool tailors metrics to address emerging market challenges, allowing companies to disclose their data and receive an Inclusive ESG Momentum Score, which indicates current performance and future ESG commitment, supporting positive change.
Richard Attias, CEO, FII Institute, said:
“Our planet faces immense challenges, including global warming, a rapid decline in biodiversity, and an increasingly unbearable cost of living for many. However, we are not without the means to address these issues. Our global financial markets are more interconnected and driven by change than ever before. Investing in ESG (Environmental, Social, and Governance) initiatives plays a pivotal role in the solution. These funds should be strategically directed toward emerging markets where their impact is most needed, all while ensuring the returns necessary for the vitality of these markets.”
Dr Daniel Klier, CEO, ESG Book, said:
“We are delighted to be collaborating with FII Institute to usher in a new approach to ESG data in emerging markets. The Inclusive ESG Score is a next generation tool for investors that identifies the sustainability leaders of today and tomorrow, with a transparent, data-driven approach that is tailored to emerging markets. Through this partnership, we look forward to providing a solution that enhances investment decision-making, and in turn helps to drive greater ESG investment flows to emerging market companies.”
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