The Sustainability Challenge for Asian Emerging Markets: Some Empirical Evidences

The intense protests against economic globalization and accusations pointed towards companies’ actions of the twentieth century have highlighted the existence of a real sustainability challenge for emerging markets. Adopting a sustainable approach able to take into account ESG aspects seems to be essential for emerging economies. However, the path of sustainable development has been slower for emerging markets than for developed countries. In this chapter, I have attempted to analyse the existence of a sustainable development path for Asian Emerging Markets. Over the last decade, investors have shown increasing attention to these markets. However, the huge growth of the Asian economy can be traced not only to developed countries but especially to the rapid development that has characterized emerging markets. In line with previous economic literature on the relationship between ESG factors and Firms’ Performance, the existence of a positive effect by introduction of ESG practices and policies has been tested from an empirical point of view. In particular, the main areas of sustainability action for emerging economies seem to be the development of environmental and social processes. However, even though governance is mainly a crucial challenge in these economies, efforts to develop good governance practices seem to be rewarded in the long run. In this context, the role of government is really important to support a tangible commitment to the implementation of ESG practices in Asian Emerging Markets which could represent a win-win to both companies and the entire environment in which they operate.