Developing Countries Didn't Write the ESG Rulebook: Should They Follow It Anyway?

Overview

Every major ESG disclosure framework, ISSB, CSRD, GRI, TCFD, SASB, was designed in Brussels, London, Frankfurt, and other financial capitals of the developed world, for institutional conditions that most developing economies do not have. This paper examines the resulting bind facing exporters, carbon markets, and commodity supply chains across South Asia, Africa, and Latin America, and asks whether the answer is regional co-authorship of ESG standards rather than continued rule-taking.

The paper traces how this bind plays out in practice: Pakistan's textile exporters navigating European sustainability questionnaires, carbon credit markets in Africa governed by standards set outside the continent, and Latin American commodity exporters absorbing the EU's deforestation regulation. It contrasts this with Bangladesh and Vietnam's garment sectors, which built sector-specific sustainability guidelines adapted to their own institutional capacity rather than importing standards wholesale.

The central question the paper poses is whether developing economies remain permanent rule-takers, or whether they build enough institutional capacity and regional coordination to become co-authors of the next generation of ESG standards, the way emerging economies have gradually shaped their own positions in trade policy and development finance over the past two decades.