ESG Investment Opportunities in EMDEs as of 2019

Source: IFC and other sources

The above image shows everything we need to know of the unmet needs and the opportunity associated with it in Emerging Markets and Developing Economies (EMDEs).

Source: JP Morgan

According to OECD, the total financial flows into developing countries reached $1.7 trillion in 2016. One can clearly see how significantly small the amounts are currently compared to what investment is needed to achieve the SDGs.

The ESG investment opportunities are estimates but what this shows is that there is a great chance for investors to alleviate poverty, mitigate climate change so as to create socially and environmentally impactful solutions. What’s not to like about that?

Investment and Finance in Emerging Markets and Developing Economies – ESG Vs SRI Vs Impact Investment

I recently started a Certification course on “Unlocking Investment and Finance in Emerging Markets and Developing Economies (EMDEs)” issued by the The World Bank Group . I will start to blog on the topic a bit on my course learnings and my own views.

I have been previously raising with 2 colleagues Finland’s first Impact VC fund called Vault Impact and also am producing the InnoFrugal conference since 2015. For the first 2 editions, the conference focused very much on frugal innovations with perspectives from Academics, R&D, State Innovation & Development Agencies and Businesses. Then I began to see a lot of startups coming up in the field and doing impact solutions with their solutions directly contributing to the UN SDGs (Sustainable Development Goals). And it also became clear to me the importance of finance and investments not just from traditional banks, development agencies etc but increasingly of impact investors. These new investors are either doing their investments under the ESG Investments (Environmental Social and Governance) or the SRI (Socially Responsible Investment) and or directly Impact Investing with more or less adhering to one or more of the 17 UN SDGs.

There seem to be various schematic representations but the below one from Western Asset nicely illustrates ESG Vs SRI Vs Impact Investing.