From so many angles within the ESG landscape, EM are different from developed markets, but this can be an advantage for experienced PMs who know how to navigate the region. Many companies in the area are family-owned, or state-owned, which can make attaining information more difficult, especially since there is still some resistance to speak to foreign investors in certain developing economies. LGM specializes exclusively in emerging, frontier and Asian markets, and is keen on building long-term relationships – on the ground – with its target companies, facilitating easier access to information, and giving PMs a clear picture of companies’ operations within their own environment. Together with the RI team’s proprietary research (which is informed by international norms and conventions such as the UN Sustainable Development Goals), and data from external ESG service providers, we use this first-hand knowledge to focus on what best practices are applicable to companies on a case-by-case basis. The RI team is therefore able to translate ESG best practices into what is relevant for an individual EM business, and what we – as investors – think is required to achieve success over the long-term. What may be environmentally appropriate for a Western-based company may be miles ahead – or even unachievable – in an EM context, so a depth of understanding into the specific business, its fundamentals, and the industry is necessary.
Our RI team provides the tools required to ask the right questions; EM companies should understand that it’s not a dictatorship, or an imposition – but rather, a partnership. That is why BMO Global Emerging Markets’ bottom-up, fundamental analysis approach, and local expertise, is vital to its methods. Our process is defined by a seasoned, diverse investment team: speaking the local languages, visiting executive teams in person and gathering information for thoughtful – and smart – asset allocation decisions. In Hong Kong, for example, we have four local investment analysts that can meet directly with companies in the region – from owners/managers to suppliers and other stakeholders, as a way to create a strong foundation for a future relationship. Given how few companies in EM report quarterly filings in dual languages, BMO Global Emerging Markets strategy is designed to uncover investment opportunities that add true diversity – and ESG value – to your investment portfolio.