March 15, 2019
A suite of educational resources for engaging clients on sustainable investing
ESG for EMD: Toward Best Practice
Our Emerging Markets Debt team has been analyzing ESG indicators for sovereigns for eight
years, and started working with Sustainalytics five years ago to build ESG coverage of its
corporates universe. During that time, it has continually enhanced its ESG processes, and over
recent months the team has drawn some conclusions about best practice in integrating ESG
into emerging markets debt, and particularly corporate bond strategies. In this paper, we explain
the importance of integrating sovereign governance indicators into corporate-issuer analysis;
selecting ESG indicators for financial materiality; gathering proprietary corporate governance
data; and engaging with bond issuers that present particularly high ESG risks.
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