The BRICS, a group of emerging economies comprising Brazil, Russia, India, China and South Africa, has expanded to include five more countries: Iran, United Arab Emirates, Saudi Arabia, Ethiopia, and Egypt. The new members were announced on January 1, 2023, after months of negotiations following a meeting in South Africa in August 2023. The group, now called BRICS+, has more countries than the G7, its rival in the global arena.

The expansion of the BRICS+ reflects the shifting geopolitical landscape, as well as the economic and energy interests of the members. The inclusion of Iran, a US adversary, may cause tensions as the US presidential election approaches. China and India, the two largest economies in the group, have ambitions to challenge the US dominance. Russia, which invaded Ukraine in 2021, remains a controversial member. South Africa, which joined the group in 2010, has been isolated after allegations of arms sales to Russia. Nigeria has surpassed South Africa as the largest economy in Africa.

Three of the BRICS+ members, Iran, Saudi Arabia and UAE, are also part of OPEC, the oil cartel that sets oil prices. OPEC has been facing challenges from the west’s efforts to diversify its energy sources, as well as internal conflicts among its members. Angola has recently left OPEC, while Venezuela is eyeing up a neighbouring country’s oil reserves.

The expansion of the BRICS+ may also have implications for the investing world, especially for ESG investors who care about environmental, social and governance issues. The BRICS+ represents a polarised power bloc that may clash with the values and interests of the west. It may be difficult to justify investing in India, the world’s largest democracy, if it has trade ties with Iran and Russia, two authoritarian regimes.