Issues facing socially conscious investors in emerging markets

Survey of 67 institutional investors, representing $130 billion worth of emerging-market investments, revealed that specific environmental, social and corporate governance issues was seen as the major challenge facing socially conscious investors in emerging-market companies. 

The survey, sponsored by the International Working Group of the Social investment Forum in Washington as well as the International Financial Corp. in Washington and The Calvert Group Ltd. in Bethesda, Md. was conducted in April and May. 

In the research Brazil was ranked as the top emerging market by allocation, leaving China, India, Mexico and South Korea behind. 

The survey also reflected distinct differences in the way socially conscious investors approach the emerging markets. For example, European investors allocated twice as much to emerging markets as North American investors. 

According to the research, European investors were much more likely to focus on corporate governance and corruption in their investment approach, while North American investors tended to favor negative screening.