NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, November 27, 2019

By Ameya Karve

Major fund managers, including BlackRock Inc. and Amundi Asset Management, are running into a roadblock as they seek to put more money into emerging-market sustainable investments: a lack of common global definitions that would make it easier to identify what to buy.

There’s a shortfall of as much as $4 trillion a year in investment needed to help address problems such as climate change, the United Nations estimates. The lack of common standards is one sticking point in filling that gap, money managers say, along with lack of data on carbon emissions and inadequate collaboration between regulators globally.

Many asset managers are shifting toward making sustainability criteria an essential part of their strategies. Challenges abound even without the issues posed by inconsistent global definitions. Disagreements about responsible investing recently led to a walkout of 11 people at NN Investment Partners, a $313 billion Dutch fund manager.

Photo courtesy of geralt.