Global Investing

RIC (without the B) carry extreme risks, index says

November 10, 2011

They may be among the only economies left to save the world — or at least the euro zone – but Russia, India and China are extremely risky bets, according to an economic, social and governance scale compiled by risk consultancy Maplecroft.

The company’s ESG Atlas and Risk Calculator allows investors to choose across ESG issues from 47 risk indices, to make country scorecards.

On that basis, China and India are among 38 countries classified as “extreme risk” in one or more categories. Among those, India is in the bottom 10 for environmental issues.

Russia, meanwhile, shows extreme governance risks, like poor rule of law and systemic corruption.

Bottom of the pile, however, are Somalia, North Korea, Myanmar and DR Congo, while Greece and Italy don’t do too well on governance and auditing standards.

These risks don’t appear to have deterred Jim O’Neill, chairman of Goldman Sachs Asset Management and coiner of the term BRIC — O’Neill is an investor in Maplecroft.

 

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