Osmosis Investment Management has launched a new sustainable equity strategy aimed at one of the most challenging and underdeveloped corners of global finance. The Osmosis Emerging Markets Core Equity Transition Fund will offer investors exposure to fast-growing economies while targeting companies that demonstrate measurable reductions in carbon, water use and waste intensity. The move signals a renewed push to bring high-quality environmental data and quantitative discipline to markets where sustainability reporting is often inconsistent and fragmented.

The launch comes at a time when new equity fund issuance has declined sharply and launches in the sustainable category have fallen even more. Despite this slowdown, interest continues to build around emerging markets, where the balance between economic expansion and environmental strain is becoming increasingly important for long-term investors. Osmosis argues that the space has been underserved due to poor data coverage and heavy reliance on negative screening approaches that do not accurately reflect companies’ real environmental impacts. Founded in 2009, Osmosis now manages $16.6 billion across equity, credit and fixed income strategies. The firm has positioned itself as a specialist in sustainability analytics, supported by institutional shareholders including the Oxford Endowment Fund, Capricorn Investment Group and Amova Asset Management. Its investment philosophy centers on detailed environmental datasets and the belief that companies that use resources more efficiently tend to outperform over time.

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The new fund is built on the firm’s Resource Efficiency process, a proprietary framework that uses primary environmental data to assess performance within sectors. Osmosis spent three years constructing comparable datasets for emerging markets, hiring a dedicated team to gather, validate and standardize corporate disclosures on carbon emissions, water use and waste generation. This effort, covering all major sectors, was designed to fix the data gaps that have long discouraged investors from pursuing more advanced sustainability strategies in developing economies. CEO and Founder Ben Dear noted that emerging markets sit “at the center of the climate challenge” and that investors have historically been forced to rely on third-party datasets that can obscure real environmental trends. Dear argued that inaccurate or incomplete information has led to portfolio distortions and unjustified exclusions, weakening the credibility of sustainable investing in these regions.

The fund aims to outperform the MSCI Emerging Markets benchmark by investing in companies that demonstrate superior resource efficiency relative to peers. Osmosis research suggests that such firms often exhibit stronger management quality, more stable profitability and lower leverage profiles. By maintaining a low tracking error, the strategy is intended to operate as a true core portfolio allocation rather than a niche environmental product. Seeded with $80 million from the IMAS Foundation, the fund will officially open on 10 December. Osmosis sees the commitment from IMAS as evidence of institutional confidence in quantitative sustainability methodologies, even in markets where data has traditionally been scarce.

Jamie Parkin, Head of Emerging Markets Research, said the project’s central ambition was to bring the firm’s developed markets methodology into emerging economies without losing granularity or rigour. He described data as “the decisive factor” in enabling quantitative strategies to function effectively in markets known for divergent accounting standards and variable ESG disclosure practices. Parkin said the long data-collection effort was essential to producing an investable model that can challenge long-held assumptions about the limitations of sustainability analysis in emerging markets.

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The launch of the Emerging Markets Core Equity Transition Fund reflects a broader shift among asset managers seeking new ways to integrate environmental performance with growth potential. As developing economies accelerate their industrial transitions and face intensifying climate pressures, investors are increasingly searching for strategies that reward resource-efficient companies without sacrificing diversification or return potential. Osmosis is positioning the fund as a response to this demand, aiming to provide a platform that can evolve with market conditions and improve the quality of sustainable investment exposure in some of the world’s most dynamic regions.

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