Unlock emerging market opportunities with ethical investing that delivers strong returns and measurable social impact
Unlock emerging market opportunities with ethical investing that delivers strong returns and measurable social impact
As a global leader committed to sustainable progress, we at Schneider Electric view ethical investing in emerging markets as more than a trend, as it is a vital shift towards integrating purpose with performance. Ethical investing involves allocating capital in ways that prioritise environmental, social, and governance (ESG) criteria, ensuring long-term value creation beyond financial returns – investing for impact.
In regions with dynamic growth and evolving regulatory frameworks, such an approach can reshape investment culture. By employing ethical investing strategies, investors can contribute meaningfully to positive change whilst benefiting from the robust development trajectories of emerging economies.
Why ethical investing is important in emerging markets?
Emerging markets present both untapped economic potential and pressing social needs. Ethical investing plays a crucial role in mobilising capital deployment with the United Nations's Sustainable Development Goals (SDGs). When investors prioritise businesses that uphold social responsibility and environmental stewardship, they foster more inclusive and resilient economies.
Designed to deliver both financial returns and measurable social or environmental outcomes, impact investing channels capital into sectors like renewable energy, sustainable agriculture, and inclusive infrastructure, with the intention of fostering a lasting positive impact. This approach is centred around people and strongly emphasise resilience.
Strategies for ethical investing
To engage in ethical investing in emerging markets, businesses should consider a well-calibrated strategy that blends risk management with impact assessment:
- Incorporate ESG screening into investment decisions. This includes evaluating how organisations manage emissions, labour rights, and governance.
- Employ active ownership, using shareholder influence to guide corporate behaviour.
- Deploy capital into thematic funds that target renewable energy, water access, or inclusive technology.
By incorporating these methods, investors can ensure that financial outcomes align with social and environmental positive impact.
Opportunities and challenges in emerging markets
Ethical investing presents unparalleled opportunities in emerging markets, particularly in sectors such as clean energy, sustainable agriculture, and smart cities. The global impact investing market was valued at $102.4 billion in 2024, with projections to nearly triple by 2030. However, challenges persist, such as limited ESG disclosures and varying regulatory standards.
Success in this space requires a deep understanding of local contexts and a commitment to investing with a long-term perspective. With the right strategy, ethical investing can foster development whilst mitigating risk through responsible practices and deployment of efficient electrical instruments.
