Investor interest in ESG has increased in recent years. While finding opportunities in this sector has become easier in developed markets, emerging markets are more vulnerable to ESG-related issues due to political turmoil and social unrest.
Karine Hirn, former CEO of East Capital, an asset manager specialising in emerging and frontier markets, spoke to Citywire Switzerland at the Geneva Forum for Sustainable Investment and explained how the firm does responsible investing.
Hirn said: ‘ESG analysis is integrated in our investment processes and there are plenty of ESG opportunities in emerging markets.
‘In China for example, where there are big problems [with environmental damage], there could be big opportunities as the government will support solution providers.’
According to Hirn, the best way to evaluate the companies is by being on the ground, meeting the management and visiting the facilities.
She said: ‘We are very active as a responsible owner, we vote at annual general meetings and nominate board members.’
Hirn, who is also one of the founding partners of East Capital, believes that in order to lead a successful business it is important to recruit passionate people.
She said: ‘When building an organisation you want to have people that share your passion for investing and the markets you work in.’
This is particularly important considering the rise of passive investing.
Hirn said: ‘It represents a challenge to active asset managers who need to sharpen their value proposition.’