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New corp gov index for emerging markets

Wednesday 9 February 2011 - by Nicola York

A new social and corporate governance index has been launched in the Middle East and North Africa in a bid to raise standards in emerging markets and boost investor interest.

The S&P/Hawkamah Pan Arab ESG Index will support improved environmental sustainability, social standards and corporate governance of businesses in the Mena region.

The index has been developed by the International Finance Corporation, the Hawkamah Institute for Corporate Governance and Standard & Poor's. It consists of 388 companies from 11 countries whose environmental, social and governance reporting puts them among the top performers compared to their market peers. 


There has been significant progress made on corporate governance standards in the Mena region, according to the IFC, but increased transparency of environmental and social standards lags behind.

Hawkamah executive director Dr Nasser Saidi said: "In response to changing economic conditions and to the practices that played a role in sparking the global financial crisis, investors are increasingly focusing on long-term risks in their investments, and ESG factors play a significant role in making those assessments.


"The index serves the dual purpose of offering a tool for investors for identifying the regional companies that perform well on the ESG parameters, while providing an incentive to Mena companies to pursue sustainable business practices through improved environmental and socially responsible operations, as well as enhanced corporate governance systems."


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