Although the issues of land use and deforestation are quite complex in the Amazon, they are fundamental for those who want to invest in the region. In the past, sustainable investments have helped increase soy and beef production while also mitigating damages to Brazil’s environment. Unfortunately, illegal deforestation and other atrocities have recently been on the rise. Educated investors have the power to maximize production without destroying forests.

To teach investors about sustainable investments, the Emerging Market Investors Alliance had the honor of hosting two experts at an agricultural webinar on January 8th, 2021. Paulo Moutinho and Marcelo Stabile, researchers at IPAM, presented a detailed overview of property rights, land governance, and deforestation in Amazon. During their presentation, Paulo discussed the details behind who owns the Brazilian Amazon, and Marcelo examined the Brazilian legislation that regulates land use. Discussions also covered topics such as the history of deforestation in Brazil, private and public property rights, and key recommendations for investors.

The Extractive Industries Transparency Initiative (ETIT) is a coalition of countries, companies, investors, and donors that adhere to a global standard to promote the open and accountable management of oil, gas, and mineral resources. On December 16, 2020, the Emerging Markets Investors Alliance had the honor of hosting Ian Mwiinga at a debt, sustainability, and governance forum. Ian Mwiinga, the National Coordinator at EITI Secretariat Zambia, provided a detailed explanation of transparency and accountability in Zambia’s extractives industry. At the event, Ian reviewed the highlights and key findings of Zambia’s 2019 EITI Report, focusing on the metrics reported and recommendations.

On December 15, 2020, the Emerging Markets Investors Alliance had the honor of hosting Bennett Freeman on a debt and fiscal governance working group call. Bennett Freeman, Principal of Bennett Freeman Associates and Former Senior Vice President for Sustainability Research and Policy at Calvert Investments, provided a detailed overview of the recent changes in human rights and business. On this call, Bennett explained how the disruptions of 2020 are transforming expectations for corporate responsibility and sustainability worldwide. Additionally, he examined investors' new focus on sociological issues. Discussions also covered topics such as inequality, Black Lives Matter, workers’ rights, and government responses to the pandemic. 

The health of the Amazon Rainforest is closely related to the health of the overall climate. The biomass in the Amazon stores about 140 years of human carbon emissions, and the plants in the Amazon act as an indispensable water-producing resource. Due to the region’s important roles in carbon storage and water cycle regulation, it remains a key component for both the health of the planet and industry. On December 11, 2020, the Emerging Markets Investors Alliance had the honor of hosting Dr. Carmen Josse on an agricultural working group call. Dr. Carmen Josse, Executive Director of Fundacion EcoCiencia, provided a detailed explanation of the causes of deforestation and forest degradation in the Amazon. Dr. Josse’s presentation focused on the key findings of a study she co-authored, “The role of forest conversion, degradation, and disturbance in the carbon dynamics of Amazon indigenous territories and protected areas.” In addition, she overviewed the importance of the Amazon, as well as carbon storage and losses caused by land management type. Discussions also covered topics such as indigenous communities, consequences for the environment, and recommendations for investors.

Day Two of the Alliance's 4th Annual EM ESG Conference took place on December 10th, 2020. Hosted by the Alliance  and Bernstein, the conference provided investors with expert-led panels and discussions covering contemporary ESG-related issues in global investment. Sectors highlighted in these discussions include ESG Investing, Governance, Agriculture, Telecommunications, and Extractive Industries.

Day One of the Alliance's 4th Annual EM ESG Conference took place on December 9th, 2020. Hosted by the Alliance and Bernstein, the conference provided investors with expert-led panels and discussions covering contemporary ESG-related issues in global investment. Sectors highlighted in these discussions include Public Sector Debt and Fiscal Governance, Agriculture, Telecommunications, and Extractive Industries. 

Carmignac is an independent asset management company. The company’s mission is to create value for its clients and positive outcomes for society and the environment. As active investors, they use shareholder rights to drive companies to improve their governance, their carbon footprint, and their human capital management.

The Emerging Markets Investors Alliance had the honor of hosting Carmignac on an ESG Initiatives working group call. On December 8th, 2020, Joseph Mouawad, a Fund Manager in the International Bonds team, presented on ESG integration at Carmignac. Joseph provided a detailed explanation of Carmignac’s philosophy, methodology, and sovereign scoring system. Discussions also included an overview of two case studies, Chile vs Russia, and China vs Saudia Arabia.

For more than 40 years, GMO has partnered with a broad range of institutions, financial intermediaries, and families to provide them with investment expertise. GMO’s investment teams are on the cutting edge of ESG investing. The company believes that ESG factors can have a meaningful impact on the long-term success of companies and countries, encouraging their investment teams to incorporate them wherever they will improve results.

The Emerging Markets Investors Alliance had the honor of hosting GMO on an ESG Initiatives working group call. On November 17th, 2020, Niyati Dangi, ESG Analyst at GMO, and Hardik Shah, ESG Practice Lead at GMO, presented on ESG integration in their Emerging Domestic Opportunities Fund. On the call, the presenters overviewed GMO’s background, as well as the lessons the company has learned from their ESG integration efforts. The three key learning points discussed in the presentation were: (1) country-level ESG risks can be material, (2) solely relying on third-party agency ratings is not enough, and (3) resolving conflicting perspectives between investment fundamentals and ESG risks is more art than science.

The Alliance hosted an extractive industry webinar on sustainability in deep-sea mining.

Dr. Saleem Ali, Professor of Energy and Environment at the University of Delaware, discussed how a global increase in the demand for critical metals, along with the environmental and humanitarian issues of terrestrial mining, has led major financial, scientific, and governmental groups to consider deep-sea mining as a viable alternative.

However, major environmental concerns exist. Matthew Gianni, the co-founder of the Deep Sea Conservation Coalition, describes the environmental risks of deep-sea mining.

E-waste is one of the fastest-growing waste streams in the world. As technology progresses, e-waste accelerates. Recent inventions, such as 5G cellular networks, cause entire infrastructures to become obsolete, creating tons of waste as devices are updated.

EMIA hosted Deepali Sinha Khetriwal and Elisabeth Smith on a Technology, Media, and Telecommunication working group call.  These experts provided a detailed explanation of how ESG relates to a circular economy and e-waste. They overviewed the background of electronic waste, why it is an issue, and potential solutions. The discussion also included topics related to e-waste legislation, the StEP Initiative, and regional perspectives in emerging markets, focusing particularly on Africa and Asia.

One of the biggest issues in public finance is the state of corporations. Among state-owned corporations, energy companies are vital to emerging market economies. Energy companies direct influence economic output, tax revenue, and social wellbeing. As energy companies transition to clean energy, it poses the question: can they do so with a minimal interruption?

To discuss these concerns, on March 2, 2021, the Emerging Markets Investors Alliance had the honor of hosting two experts at a debt and fiscal governance program. Patrick Heller, an Advisor at the National Resource Governance Institute, and David Manley, a Senior Economist at the National Resource Governance Institute, provided a detailed overview on the impact of the energy transition on national oil companies (NOCs). During this call, Patrick and David examined the role of national oil companies, reviewing their methods, results, and applicable policy. Discussions also covered topics related to financial entanglement, climate-related financial risks, climate managed and climate breakdown scenarios, and key recommendations for investors.

The Alliance welcomed Erica Westenberg, Kaisa Toroskainen, and Descartes Mponge Malasi of the National Resource Governance Institute to lead a discussion on supply chain mismanagement in the DRC during a working group call. Westenberg, Toroskainen, and Malasi assessed the current state of the electric vehicle battery supply chain in the DRC. They urged investors to assess risks against minimum standards, support efforts to improve company sustainability practices, and deepen their understanding of current events in producing countries and regions.

The lack of accountability for indirect suppliers leads to illegal deforestation and cattle laundering to permeate the cattle supply chain. This oversight causes illegally born or raised cattle to be distributed.  The Emerging Markets Investors Alliance had the honor of hosting presenters from Chain Reaction Research’s team at an agricultural working group call. On September 18, 2020, these presenters provided a detailed explanation of deforestation risks in the Brazilian cattle supply chain. On this call, Chain Reaction Research presented information on their recently published report: Brazilian Beef Supply Chain Under Pressure Amid Worsening ESG Impacts. The main issue of focus they presented was the lack of monitoring of indirect suppliers. In addition, Simon Hall overviewed a cloud-based tool that can be used to trace cattle, VISIPEC. Simon examines the tool itself, as well as how meatpackers in the cattle industry have responded to this possible solution. Discussions also include topics related to the Brazilian beef market, deforestation, financial risks, and actions and agreements.

The Emerging Markets Investor Alliance had the honor of hosting Vanessa Forti, affiliated with United Nations University and a Programme Associate at SCYCLE. On this call, she provided a detailed explanation of the recent global monitoring of e-waste findings, summarizing its key findings. Vanessa also overviewed recent developments in legislation aspects and explored the environmental impacts due to the growing e-waste produced by this generation. Discussions also covered topics related to sustainable development goals, e-waste statistics, best practices, and e-waste’s impact on different sectors.

Community Consent: How EM Investors Should Think about Community Consent in Extractive Industries is an issue brief published by the Alliance that aims to inform investors on the pivotal role local populations play during the decision-making processes surrounding general mining activities. The brief describes the value of community consent for all stakeholders, as issues involving grievances with local populations can hinder or shut down a project, resulting in potentially devastating losses for all parties involved. The brief also discusses the development of metric systems used to measure how companies perform on community consent, and concludes by encouraging investors to strongly consider a company’s efforts in community consent when looking to invest in an extractive company.