New Research published by EIRIS, the London based non-profit responsible investment research specialists, shows that amongst leading emerging market economies, China, Egypt and Vietnam perform the worst in terms of Environmental, Social and Governance (ESG) indicators.

The 2010 version of the EIRIS Country Sustainability Profiles for investors in sovereign wealth bonds includes a comparison of those emerging market countries that will play a key role in driving global economic development over the decades ahead. The countries analysed for the comparison were Brazil, China, Egypt, India, Indonesia, Mexico, Pakistan, Philippines, Russia, South Korea, Turkey and Vietnam. Co-Head of Research at EIRIS, Carlota Garcia-Manas said: ‘The poor performance of China, particularly in the area of Governance but also scoring low on environmental indicators, should be of particular concern to investors given that its economy is due to overtake the USA’s as the world’s largest over the next 20 years.’

The three best performing emerging market countries were South Korea, Brazil and Mexico. Both Mexico and Brazil scored higher on Environmental indicators than Canada and the United States, showing that it is possible for emerging markets to experience rapid growth and to mitigate ESG risks. The case of Thailand shows the importance to investors of integrating ESG factors into their decisions about investing in sovereign wealth bonds. Thailand’s political stability

indicator score has declined every year for the five years that EIRIS has been publishing its Country Sustainability Profiles. In 2009 the credit rating agencies downgraded the status of Thailand’s sovereign credit ratings, citing the inability of the government to prevent civil unrest. The ratings agencies have recently sounded warnings about additional downgrades in response to continuing political instability in the country.

Of all 68 countries surveyed on the 49 environmental, social and governance indicators the three best performers were Sweden, Austria and Switzerland. The EIRIS Country Sustainability data is delivered in such a way that it can be manipulated by users to create their own views and weightings for particular issues to give the investor a bespoke rating, ranking and profile for each country.

For more on the EIRIS article, visit: http://www.eiris.org/media.html#Countrybonds

For the EIRIS Country Sustainability data, click: http://www.eiris.org/managers/ps_country_ratings.html