ESG integration is best used as a tool to improve portfolio returns and/or reduce risk. While usually thought of as a company-level concern, material ESG data can be very useful at the country level as well, especially in emerging markets. ESG signals are only as good as the quality of their inputs.

Emerging market economies are more vulnerable to the ill effects of ESG issues, but because transparency into such issues in these regions has been lacking, and because investors may have different understanding of risks and opportunities than ESG ratings agencies, integration has been difficult," the white paper says.