This is a critical distinguishing factor. Instead of simply adopting Western models, emerging markets are developing ESG frameworks that resonate with their specific challenges and opportunities.

• Contextual Relevance: While global standards (like ISSB, GRI) provide a baseline, local frameworks focus on the most impactful issues for their region.

• Examples:

  • Water Security: In regions prone to droughts or with limited access to clean water, water management, conservation, and sanitation are paramount ESG concerns. Projects might focus on efficient irrigation, water recycling, or providing safe drinking water.

  • Informal Labor: A significant portion of the workforce in many emerging economies operates in the informal sector. Localized ESG frameworks might focus on transitioning informal workers to formal employment, ensuring fair wages, safe working conditions, and social protection for this segment.

  • Sustainable Agriculture: Given the agrarian basis of many economies, ESG here emphasizes sustainable farming practices, food security, soil health, and fair trade for smallholder farmers.

  • Governance (Africa Example): Beyond traditional corporate governance, African ESG frameworks increasingly integrate broader governance issues like anti-corruption, transparency in public sector debt, and strengthening development finance institutions (DFIs) to ensure sustainable development. Governance-linked bonds are an emerging tool in this regard.

  • Community-Company Relations: Especially in extractive industries, effective community engagement, fair land tenure, and dispute resolution mechanisms are crucial social aspects that often receive tailored attention in local frameworks.