The MUFG Global Markets Podcast

Could ESG lead to capital outflows from EM high yielders? : The MUFG Global Markets Podcast

April 30, 2021

Environmental, Social, and Corporate Governance (ESG) investing remains a nascent asset class across emerging markets. As investors put ESG more at the centre of their asset allocation decisions – especially if “values-based” rather than “risk-based” investing becomes more marked – then high yielding emerging markets at the weaker end of the credit spectrum might find it challenging to access capital which in-turn could raise the price of funding for these countries.

Ehsan Khoman, Head of Emerging Markets Research (EMEA), contextualises the ESG conundrum facing high yielding emerging markets and believes that more government and multilateral engagement will be required to safeguard capital flows.

 


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