Although the ESG (environmental, social and governance) acronym is relatively new, the idea of developing a powerful franchise by looking after the interests of a range of stakeholders – beyond shareholders – has been successfully implemented for more than 100 years. In the Victorian era, a few enlightened industrialists, including William Lever (Unilever) and George and Richard Cadbury (founder of Cadbury, now Mondelez International), realized that their businesses would be better in the long run if their workers were properly housed and given opportunities for education and healthcare. Since then, many investors have discovered the benefits of ESG considerations within their investment holdings.
This is particularly true in emerging markets, where transparency around the activities of companies and governments is often still low compared to developed market peers.
Sudhir Roc-Sennett, Senior Portfolio Adviser to the Vontobel Emerging Markets Equity strategy, discusses some of the Quality Growth Boutique’s insights into ESG for investors in emerging markets.