December 4, 2018 / News

Which emerging market stocks score best for ESG?

By Joe McGrath, ESG Clarity

Responsible investing research and rankings group, Vigeo Eiris, has released its six-monthly list of best performers

Which emerging market stocks score best for ESG?

Sustainability ratings group Vigeo Eiris has published its list of the best performing stocks in developing markets, based on environmental, social and governance factors.

The data group considered 855 companies across 31 different countries in assessment and is a revision of the list published in June.

Companies that score well for their approach to human rights, employment practices, environmental protection, corporate governance, business ethics and social development, were those that made it onto the list of best performers.

They included the Brazilian and Chilean arms of Banco Santander, the Mexican and Turkish operations of the Coca Cola brand and chipmaking giant Taiwan Semiconductor Manufacturing. The full updated list is available here.

In a statement explaining the methodology used, Vigeo Eiris said it now considers around 330 indicators to reach a company’s score.

In a change to its previous approach, the company has also taken the step to exclude companies that are deemed to be involved in controversy on “critical issues” linked to social responsibility or those which are intentionally opaque in their operations.

Last month, in an interview with ESG Clarity’s sister publication, Expert Investor, Thomson Reuters’ head of ESG proposition, Elena Philipova, said that ESG data sets can be useful to compare companies, but warned selectors to familiarise themselves with the parameters of industry indices.

“Let’s take one company that publishes emissions on its headquarters and another on all its global operations, if we look at the absolute number, the one that has partial disclosure is going to look better,” she said.

“But it’s not, because this company manages its footprint more effectively, it’s just lacking transparency and the scope of the data can be global, regional or segmental.”