Business Report :
Emerging economies are confronting a massive USD 3.7 trillion annual shortfall in Environmental, Social, and Governance (ESG) finance required to achieve the United Nations Sustainable Development Goals (SDGs) by 2030, according to a report released on Monday, by Dun & Bradstreet.
The study, titled “ESG Funding in Emerging Markets,” shows that while global ESG investments have reached USD 3 trillion, developing nations are still falling behind due to policy inconsistencies, weak regulations, and limited financial innovation, despite growing interest from global investors.
Europe continues to dominate ESG funding, raising USD 405 billion in 2023 alone, while Africa accounts for less than one percent of global green bond issuances, highlighting financial and governance disparities.
The report classifies emerging economies based on ESG maturity. Early-stage markets such as Pakistan, Kenya, and Nigeria, with Green Bond-to-GDP ratios under 0.5 percent, are primarily focused on building awareness.
Scaling markets, including Thailand, the Philippines, and South Africa, are advancing through sustainability-linked bonds and clean energy projects, with ratios between 0.5 and 1 percent.
Advanced markets like Saudi Arabia, which exceed 1 percent, have integrated ESG goals into national strategies such as Vision 2030.
Some emerging markets have already achieved significant milestones. Thailand issued Asia’s first sovereign Sustainability-Linked Bond in 2024, while South Africa secured USD 5.1 billion in commitments from the European Union under its Just Energy Transition Partnership.
The report emphasizes that clear regulations are a key factor in ESG growth, with countries such as China, India, and Singapore moving rapidly due to transparent reporting frameworks and sustainable finance policies To close the ESG funding gap, Dun & Bradstreet recommends that emerging economies, including Bangladesh, align national policies with global sustainability standards, promote blended-finance models combining public and private capital, improve ESG data transparency, and integrate sustainability into business and banking practices.
According to the study, regions like South Asia, the Middle East, and Africa could attract significant sustainable investment if they adopt stronger governance, clearer regulations, and innovative financial solutions.
