How can investors target returns while supporting sustainable development? The SDGs may point to some of the biggest opportunities in emerging markets.
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Last year was another resilient period for emerging market debt (EMD). Inflation continued to moderate across many economies, while issuers benefited from stronger balance sheets and improved fundamentals. Primary issuance rebounded, creating a rich pipeline of opportunities for active investors.
Beyond the improving market backdrop, one of the most interesting developments has been the continued expansion of sustainable investment opportunities.
Emerging market and developing economies sit at the heart of many of the challenges identified by the United Nations Sustainable Development Goals (SDGs). They are home to the majority of the world's population and account for around 45% of global GDP, yet receive a disproportionately small share of global financial assets.
The funding gap remains substantial. According to the OECD and UNCTAD, an additional US$4.3 trillion per year is needed to meet the SDGs by 2030, with more than half directed towards the energy transition. While this presents a significant development challenge, it also highlights areas of unmet demand across sectors such as healthcare, infrastructure and clean energy.
For investors, the SDGs can provide a useful framework for identifying companies that are helping address these challenges. The following examples illustrate how businesses providing essential services can generate both positive societal outcomes and attractive commercial opportunities.
Turning the tide on water access
Access to clean water and effective sanitation remains one of the most pressing infrastructure challenges across many emerging markets.
Sabesp, Brazil's largest water and sanitation company, plays a critical role in helping address these needs across São Paulo. Last year, the company issued its inaugural blue bond, with proceeds dedicated to wastewater infrastructure, sewage treatment upgrades and social tariff programmes benefiting around 965,000 families.
The company offers an attractive combination of resilient, regulated cash flows and a clear growth trajectory, supported by significant investment in water and sanitation infrastructure. It exceeded its 2025 targets for new water and sewage connections, demonstrating its ability to expand access to essential services while delivering on its commercial objectives.
For businesses like Sabesp, improving access to water and sanitation is not separate from financial success – it’s central to it.
Powering the energy transition
The transition towards cleaner and more efficient energy systems is creating significant investment opportunities across emerging markets.
In Uzbekistan, SQB is helping finance renewable energy, energy efficiency and sustainable infrastructure projects as the country modernises its economy. Despite operating in a traditionally carbon-intensive market, the bank has embedded sustainable finance into its growth strategy and strengthened its governance and risk-management frameworks to support this ambition.
Its US$500 million sustainability bond is helping fund projects that have already delivered measurable outcomes, including energy savings, renewable power generation and the installation of more than 800,000 smart meters.
Expanding access to healthcare
Healthcare access remains a major challenge across many emerging markets, where private insurance penetration is often low and health systems face capacity constraints.
Auna is helping address this gap through an integrated healthcare platform operating hospitals, outpatient facilities, prevention services and health plans across Peru, Colombia and Mexico. The company serves around 1.4 million healthcare plan members and has developed a particular focus on oncology, combining prevention, diagnosis, treatment and ongoing care through a vertically integrated model.
Auna's focus on affordability and access is particularly important. Through a range of healthcare plans tailored to different income segments, the company has expanded access to the mass market.
Its impact extends beyond its own customer base. Through the Trecca Ambulatory Center public-private partnership in Lima, Auna is helping expand outpatient healthcare capacity for up to three million beneficiaries annually.
As access to healthcare improves, the company benefits from growing demand for its services, demonstrating how addressing unmet healthcare needs can create long-term opportunities for both patients and investors.
Where profit meets purpose
The need for investment across emerging markets remains significant. Whether improving access to healthcare, upgrading water infrastructure or accelerating the energy transition, the scale of the challenge is substantial and unlikely to diminish any time soon.
At the same time, the opportunity set continues to expand. The growth of sustainable bond issuance and increasing participation from corporate issuers are providing investors with a broader range of opportunities to access businesses helping address some of the world's most pressing development challenges.
The SDGs are often viewed as a sustainability framework. They can also serve as a useful guide to future investment opportunities. By highlighting areas of unmet demand across emerging markets, they help identify companies providing essential services, supporting economic development and enabling long-term growth.
For investors, the most compelling opportunities are often found where commercial success and sustainable development reinforce one another. The SDGs can therefore provide a roadmap to some of the most attractive opportunities in emerging markets.
We will shortly publish our annual SDG report that can be found on our website:
Companies selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance.
The value of investments, and the income from them, can go down as well as up and investors may get back less than the amount invested. Past performance is not a guide to future results.
abrdn Investments Limited registered in Scotland (SC108419) at 1 George Street, Edinburgh EH2 2LL. Authorised and regulated in the UK by the Financial Conduct Authority.
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Aberdeen Investments
Aberdeen Investments
