The Iron Curtain came down more than two decades ago. With the eastern expansion of the European Union that followed, especially in this time of rapid globalisation, one might have thought that all things would be equal by now. But they are far from it.
Of course, the pension systems of central and eastern European (CEE) countries had some catching up to do and they did the best they could by introducing second and third pillar pensions from the 1990s onwards.
However, since the financial crisis, many CEE governments have cut contributions to the private pillar to plug their severe funding gaps with the accumulated pension assets.
But it is not just purely pensions where the east appears to be different from the western world. Russia hit the headlines recently over claims of rigged elections, and angry protests ensued. Suspicion still hangs in the air when it comes to investments in the former eastern bloc. Many western investors fear corruption remains a problem the further east you go and some are concerned over shareholder rights abuses.
The low level of interest in environmental, social and governance (ESG) issues in the region is reflected in the small number of CEE signatories to the UN Nations Principles for Responsible Investment and limited number of sustainable equity funds.
But slowly corporate governance is turning a corner in the rapidly developing CEE countries and today, in the wake of the financial crisis, companies are more willing to discuss ESG issues with investors than just a few years ago, fund managers report.
Poland is widely cited as the frontrunner of ESG in CEE by western investors - there, ESG receives the support of its domestic law, government and stock exchange and is further promoted by a responsible investment forum. Nevertheless, the ESG market overall remains relatively weak and the provision of ESG data by companies non-transparent. And, while efforts have been made to improve corporate governance, environmental aspects are still being grossly neglected.
Therefore it really is up to investors from other parts of the world to raise the issue and educate companies further - by viewing them in the local context and without taking a neo-colonial approach.
But for the time being it seems that in today’s globalised world where east regularly encounters west, in many areas east remains east.