A Comparison of Europe Indexes and Emerging Markets Indexes on ESG Activities

The introduction of the United Nations’ Principles for Responsible Investment (PRI) in 2006 marked the incorporation of environmental, social, and governance (ESG) factors into the financial evaluation of companies. To promote corporate social responsibility, many governments have mandated that listed companies report on their ESG activities. Developed economies such as the European Union (EU) will mandate that all listed and large companies report on risks related to environmental and social factors from 2025. Emerging economies such as China will require large listed companies to report ESG activities starting in 2026. India even already started the requirements since 2022–23. This paper seeks to compare the performance of ESG-focused companies in (Europe) with those in emerging markets. The goal is to understand whether developed markets exhibit more mature ESG practices and whether these contribute more positively to financial performance. It is also important to investigate whether active ESG engagement positively affects financial performance from country level. This study also compares the cases of Germany, China, and India. This study utilized selected data from MSCI indexes spanning 2021 and 2022. The results showed that companies in developed European markets performed better than their counterparts in emerging markets among the strong ESG companies while the Indian ESG Index outperformed the German and Chinese ESG indexes. © Law Journals 2025.