ESG practices: a comparative overview of developed and emerging markets

Henrique Castro Martins

Chapter 15 in Handbook of ESG Investing, 2026, pp 392-408 from Edward Elgar Publishing

Abstract: This chapter compares the determinants and outcomes of sustainable finance practices between developed and emerging markets. While firms in developed economies benefit from stronger regulatory frameworks and institutional pressures, emerging market firms face unique challenges to adopt strong sustainable practices, such as weaker governance, economic instability, and cultural barriers. Nonetheless, recent evidence shows that companies in emerging economies are catching up—and in some cases outperforming—developed market counterparts. The chapter reviews literature on ownership structures, institutional investors, state participation, governance mechanisms, and cultural influences, highlighting key differences between these contexts. It also identifies barriers to ESG adoption in emerging markets, such as cost pressures and dependency on fossil fuels, while outlining opportunities including access to global capital, supply chain integration, risk management, and legitimacy building. The findings suggest that emerging market firms are increasingly well-positioned to lead global ESG practices in the coming decades.

Keywords: Sustainable Finance; ESG disclosure; ESG practices Barries and Opportunies; Emerging markets; SASB Materiality (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035322770
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