Riyadh – Mubasher: Future Investment Initiative Institute (FII Institute) released Inclusive ESG Tool and Score with the goal of helping emerging market companies and global investors unlock investments while eliminating the $5.40 trillion environmental, social, and corporate governance (ESG) investment gap within.

The new tool, which was announced during the seventh FII conference in Riyadh, will also work on improving the quality of data on ESG in emerging markets while empowering their businesses to receive financial flows, according to a press release.

There is an estimated $38 trillion in current sustainability-led assets under management (AUM) across the globe in addition to a growth in ESG investing over the past 10 years. Meanwhile, emerging markets, which represent 58% of global gross domestic product (GDP), still receive less than 10% of ESG capital flows.

CEO of FII Institute, Richard Attias, said: “Our planet faces immense challenges, including global warming, a rapid decline in biodiversity, and an increasingly unbearable cost of living for many. However, we are not without the means to address these issues.”

Attias added: “Our global financial markets are more interconnected and driven by change than ever before. Investing in ESG initiatives plays a pivotal role in the solution. These funds should be strategically directed toward emerging markets where their impact is most needed, all while ensuring the returns necessary for the vitality of these markets.”

From his side, Daniel Klier, CEO of ESG Book, said: “The Inclusive ESG Score is a next generation tool for investors that identifies the sustainability leaders of today and tomorrow, with a transparent, data-driven approach that is tailored to emerging markets.”

Klier concluded: “Through this partnership, we look forward to providing a solution that enhances investment decision-making, and in turn helps to drive greater ESG investment flows to emerging market companies.”

In 2021, around 3.40% of global ESG-based AUM were held in emerging markets, while 20.20% of total global AUM were held in emerging markets, which resulted in the $5.40 trillion investment gap. 

At the three-day FII7 event, a total of 23 entities have been strategic partners for the event, which gathered leaders from across the globe in addition to regional officials and investors.