ESG's Appeal Fades in Emerging Markets as Profit Seeking Eclipses Virtue.

Sustainable investments in emerging markets are struggling due to capital outflows and the appeal of higher-yielding energy bonds. Emerging markets have experienced consecutive outflows for the past three years, largely due to global monetary policies. Bonds from companies with tarnished ESG reputations, such as Vedanta Resources Ltd. and Braskem SA, have provided higher returns compared to ESG-focused strategies. The sale of green bonds in developing nations has also contracted. Investors are finding it difficult to navigate different regulatory frameworks and the European Union's crackdown on the use of the ESG label is deterring investors. However, money managers emphasize the importance of including emerging market issuers in sustainable finance initiatives. [Extracted from the article]