FrontierView just completed its latest collaboration with the University of Maryland’s Global Consulting Fellows student team from the Smith School of Business. Students worked on a series of case studies exploring the way ESG plays out in corporate strategy across emerging markets globally.
The students selected four countries to investigate – India, Thailand, South Africa, and Mexico. First, they evaluated local regulations around ESG and consumer sentiment towards companies’ involvement in ESG. This provided important context about which aspects of ESG are most relevant to regulators and populations in each of these markets, and consequently, which ones businesses really need to ensure that they are considering local, social, and political priorities.
Next, the Global Consulting Fellows selected one to two local companies from each country and assessed the types of ESG initiatives they are engaging in their home market and how effective these have been over the years. Students also looked at these as a competitive threat to multinationals operating in the market – which may have a different set of ESG priorities due to where they are headquartered or how well they are localized in individual countries. Finally, the students suggested actions MNCs can take as they compete against local players in terms of ESG initiatives in the context of the four countries. Case studies included companies like Mahindra and Mahindra, Bangkok Transit System, and others.
Key insights from the research include:
- The evolving nature of local legislation and its varying levels of sophistication create complex operating environments. The teams found that in markets like Mexico, much of the more formal ESG compliance is driven by companies, while countries like Thailand and South Africa have more robust and diverse regulations on ESG issues.
- Among various components of ESG, populations prioritize these differently. In India, the teams found environmental and social concerns around unemployment were high on the agendas, while polling showed that in Thailand, areas such as sustainability in packaging and overall environmental protection dominated.
- The teams found that local players can often have highly tailored ESG practices to the priority areas for local stakeholders – governments and consumers in particular. In some cases, local companies will also seek to lead and be standard-setters in their domestic market. MNCs that are operating with a framework based on US or EU-driven ESG priorities need to ensure they are taking into account local legal, social, and competitive nuances as they adapt their ESG strategies to the unique conditions across emerging markets.
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