On September 1, 2020, the Emerging Markets Investors Alliance had the honor of hosting Ian Carruthers on a Debt and Fiscal Governance call. Ian Carruthers, Chair at the International Public Sector Accounting Standards Board (IPSASB), discussed the benefits of accrual accounting in the post-COVID-19 pandemic era. Ian split his presentation into two parts. In the first half of his presentation, Ian overviewed IPSASB’s background, the ‘Richer’ accrual accounting picture, the differences between UK accrual and GFS comparisons, as well as poll questions. In the second half of Ian’s presentation, he examined policy context, recent guidance, poll questions, and what investors can do to encourage the benefits from the implementation of accrual accounting methods.

Alquity is an asset manager that focuses on emerging markets, frontiers, and ESG. The Emerging Markets Investors Alliance had the honor of hosting Mike Sell, Head of Asian Investments at Alquity Investment Management, at an ESG Initiative call on August 26, 2020. On this call, Mike provided a detailed explanation of Alquity’s unique approach to ESG investing. He discussed Alquity’s organization, as well as key milestones in their development. Additionally, Mike overviewed the company’s selection criteria and investment process, highlighting how they incorporate ESG criteria into their valuation and financial analysis. Discussion included topics related to their KPIs, engagement, voting, portfolios, and Future World fund.

Major tailings accidents in recent years such as at Samarco and Brumadinho in Brazil have awoken investors to risks posed by the long-term storage of mining waste. With an estimated 3500 tailings storage facilities (TSFs) worldwide, and more being built every year, accidents are likely to continue. Issue Brief: Tailings Management is an issue brief published by the Alliance that explains in detail the multple risks tailings pose to emerging markets. The brief provides a detailed analysis on the current state of tailings management in emerging economies, reviewing recent tailings failures and the ensuing attempt of extractive companies to improve mineral waste management. The brief assesses the industry's shortcomings in addressing these failures, and concludes with offering insight into how investors can best assess tailings risks. 

Public sector balance sheets are an essential tool to promote good governance practices with transparency and accountability. Balance sheets are limited for private companies and they are rarely used in government sectors as well.

Jacob Soll, Professor of Philosophy, History, and Accounting at the University of Southern California, spoke on EMIA’s routine debt and fiscal governance working group call regarding the necessity of balance sheets.

The Debt and Fiscal Governance working group is designed for portfolio managers, research analysts, asset management firms, and public policy experts. The objectives of these calls are to educate investors about why fiscal transparency is important for an accountable government and to encourage investors to advocate for better implementation of government fiscal practices.

The Alliance hosted an Extractive Industries working group call on responsible lithium mining in Chile. Nicolas Maennling & Nikolaus McLachlan of GIZ, Germany’s federally funded international development agency, presented on the current issues pressing Chile’s lithium mining industry, from environmental degradation and water scarcity, to deeply rooted mistrust between major stakeholders.

The Emerging Markets Investors Alliance had the honor of hosting Lee Buchheit, honorary professor at the University of Edinburgh Law School, along with many other notable presenters at an investor call on July 30, 2020. This call was their fourth in their Speaker Series entitled Debt, Sustainability and Governance Forum.

The objective of this call was to apply EMIA’s goals of debt oversight, fiscal transparency and environmental sustainability to recent sovereign issues surrounding the COVID-19 pandemic. The speakers explored the short and long term liquidity needs of low and middle income countries.  The central idea behind all the arguments is countries will struggle as they fight both the public health crisis and attempt to make debt service payments. Due to continued uncertainty and prolonged hinderance of economic activity the Debt Service Suspension Initiative will be insufficient in meeting the refinancing needs of many emerging markets. Presenters addressed these growing concerns along with recommendations and possible solutions.

In this current pandemic caused by COVID-19, fiscal policy is a powerful weapon to address public health shortfalls and stabilize public finances in developing countries. The Emerging Markets Investors Alliance hosted Vitor Gaspar at an investors call to discuss fiscal policy.

Vitor Gaspar, Director of Fiscal Affair at the International Monetary Fund (IMF), provided a detailed examination of methodology that supports debt, sustainability and governance. Vitor overviewed a framework of analysis that focuses on market development, policies and appropriate policy responses. Vitor also highlighted key aspects of good governance, providing both examples and actionable recommendations.

This call was EMIA’s third in their Speaker Series entitled Debt, Sustainability and Governance Forum.

On July 15th 2020, the Alliance had the honor of hosting Petrobras' first-ever climate focused webinar. This webinar took place in the wake of Petrobras’s announcement of support for the Task Force on Climate-related Financial Disclosures (TCFD), as well as an update to its Climate Change Supplement. During the discussion, Andrea Almeida, CFO, Carla Albano, Head of Investor Relations, and Viviana Canhão, Climate Change Manager, discussed how Petrobras is implementing new strategies and initiatives that aim to reduce the company's carbon emissions and highlight sustainability. 

Deforestation Risk in the Brazilian Soy Supply Chain is an issue brief published by the Alliance that aims to inform investors of issues found in the Brazilian soy supply chain. As a part of the Soy Toolkit, this brief presents tools, initiatives, and approaches to decouple soy sourcing from deforestation, natural habitat conversion, and human rights violations. This brief provides an overview of soy’s role in the supply chain, as well as the risks faced by companies and investors. Other topics covered in the brief are related to best practices, questions for portfolio companies, resources, and key takeaways.

The Emerging Markets Investors Alliance had the honor of hosting Ceyla Pazarbasioglu, Vice President of the World Bank at an investor call on June 30, 2020. This call was their second in their Speaker Series entitled Debt, Sustainability and Governance Forum. The aim of this series is to call investors, governments, and other key players in the emerging market debts crisis into action. EMIA seeks to encourage governments to use debt relief in a transparent way that secures public interest, ensuring environmental sustainability. In addition to, urging accountable parties to provide both investors and citizens with timely access to pertinent data. On this call, Ceyla overviewed publications and recent data from the World Bank's research on the debt crisis, as well as offered recommendations to progress towards a healthier global economy.

On June 26th, 2020, the Alliance hosted a roundtable discussion on the current state of the mining industry in Latin America. During the roundtable, a group of policy experts, along with representatives of the industry's major stakeholders, discussed ESG issues within the region. Areas of discussion include the usage of data as a tool to improve decision-making processes in mining regions, how Latin America's largest mining companies are addressing water management in regions with large mining projects, and the distinct, novel challenges COVID presents to the industry. The goal of the roundtable was to provide mining companies with a mechanism to communicate their policy intentions and actions to the investment community and receive meaningful feedback.

On June 23rd, 2020, the Emerging Markets Investors Alliance had the honor of hosting various presenters from a variety of organizations to overview Debt, ESG, and Sustainability on their debt and fiscal governance working group call. The diverse representatives discussed asset managers' ethical responsibility surrounding the Debt Service Suspension Initiative (DSSI). On the call, presenters also explored the prospects for COVID bonds and other innovative bond structures as a solution for the pandemic debt crisis. Discussions included topics related to ESG Investing, private sector involvement, public sector debt relief, and the recovery capacity of emerging markets. 

FAMA Investimentos is an independent asset management firm that specializes in Brazilian equities. They aim to provide absolute returns in the long term by focusing on value investing, promoting investments in quality companies with high ESG standards. On July 21, 2020, the Emerging Markets Alliance had the honor of hosting Fabio Alperowith on an ESG Initiative working group call. Fabio, Founder and Portfolio Manager at FAMA Investimentos, spoke about FAMA Investimentos’ ESG and sustainability efforts. Fabio provided a detailed overview of the company’s holistic approach, summarizing recent engagements in the public and private sector, as well as ESG developments and integration. Discussions also covered topics related to COVID-19, Bolsonaro, and ESG advocacy.

On June 18th, 2020, the Alliance welcomed Johnny West, Director of OpenOil, to host an extractive industry working group call on public sector financial modeling. During the call, West describes how the principles of public sector financial modeling can be used to evaluate and assess public sector extractive projects, providing an analysis of several contemporary public sector extractive projects, including projects in Lebanon (gas), Guyana (petroleum), and Mozambique (gas).

Antimicrobial identifies a class of drugs that destroy or inhibit the growth of microorganisms. Antimicrobial resistance occurs when a microbe adapts to the point where it is impervious to drugs and treatment. As this resistance spreads, we lose the ability to treat once curable diseases. This leads to a plethora of unavoidable deaths, ravaging the economy and public health.

On June 10th, 2020, the Alliance hosted an EI investor call where several extractive experts discussed decarbonizing utilities in Chile and beyond. During the call, Alfonso Gallarce, Head of Climate Finance at the Chilean Ministry of the Environment, describes Chile's ambitious climate change agenda. The agenda, spearheaded by a consortium of public and private groups, contains various medium and long-term sustainability goals that aim to transform Chile into a carbon-neutral country by 2050. Alexander Varschavsky, a senior analyst at LarrainVial, discusses how low renewable energy prices in Chile are contributing to the country's rapid decarbonization process, while Perrine Toledano, head of Extractive Industries at the Columbia Center on Sustainable Investment, describes how utility corporations continue to underperform across key SDG metrics, calling on the industry to implement standardized SDG reporting to increase transparency and accountability. 

On June 4, 2020, the Emerging Markets Investors Alliance launched their new Speaker Series entitled Debt, Sustainability and Governance Forum. EMIA had the honor of hosting Schwan Badirou-Gafari, the General Secretary of the Paris Club, to speak on this investor call.  The objective of this forum is to engage policy experts, investors, and officials from international institutions and emerging market governments to discuss the G20 debt service suspension. In addition to, next steps in the debt crisis faced by emerging markets and low-income countries. During this call, Schwan overviewed the role of the Paris Club, as well as discussed topics related to private sector engagement and sustainable policies.

The Open Budget Survey is the most comprehensive and frequent analytical survey that measures government budget transparency, as well as other measures of fiscal transparency. The Open Budget Survey provides important data for significant insights into the level of accountability and fiscal responsibility in governments. On June 2, 2020, the Emerging Markets Investors Alliance was joined by Elena Mondo and Claire Schouten at a working group call. Elena Mondo, Senior Technical Advisor at Open Budget Initiative, and Claire Schouten, Senior Program Officer of International Advocacy at International Budget Partnership, discussed the Open Budget Survey. On the call, Elena and Claire overviewed the methodology of the survey, along with its finding and implications.

The Alliance hosted a working group call where Emily Greenspan presented on community consent in the mining industry. During the call, Greenspan discussed Free, Prior, and Informed Consent (FPIC), a process through which mining companies consult indigenous and local communities before the start of a mining project. While FPIC continues to gain traction in the extractive industry, as key global financial and legal institutions are recognizing and embracing its measures, Greenspan discussed the importance of adopting FPIC as an industry-wide procedural standard. Greenspan also described how companies that do not practice FPIC often have costly project delays and cancellations that are risky for investors.

The world is being shaped by climate change, limited natural resources, and the effects of COVID-19. If meat, dairy, and egg producers use more responsible methods of production there will be tremendous benefits for animals, the environment, public health, and employees in the protein industry. Farm animal welfare is a well-known ethical issue that is becoming an increasingly recognized source of business risks, as well as a commercial opportunity for food companies.

Martin Zerfas, Program Manager for Farm Animal Welfare at Humane Society International, and Maria Martin, Animal Welfare Specialists and Corporate Policy and Program Manager for HIS, focused on the risks associated with factory farming, recommending animal welfare standards for investors to engage with their portfolio companies.