Asset management’s buoyant ESG jobs market

Recruitment of dedicated ESG personnel has increased among active asset managers, research shows.

Russell Investments showed industry employment trends reflected rising attention on sustainable investing, with 75% of participants in the firm’s annual ESG survey adding dedicated ESG personnel in the past year.

Hiring took place across various functions such as ESG teams (23%), data integration and analytics (10%), stewardship (9%), and equity investment (7%). 

The ninth annual ESG Manager Survey published by the firm featured responses from 169 asset managers globally who collectively manage $20 trillion in assets under management.

“As the industry continues to focus on responsible investing practices, active managers from all major asset classes are increasingly incorporating ESG considerations into their investment processes and hiring for ESG-related roles,” said Kris Tomasovic Nelson, senior director, head of ESG investment management at Russell Investments. 

Aligned with the increase in ESG roles is the finding that ESG factors were increasingly driving investment decision-making. Only 7% said ESG factors do not drive investment decisions, which is down from 22% in 2022.

Direct company engagement has become the primary source for ESG information, the research found.

Nelson said: “We believe this reflects a deepening recognition that ESG issues — encompassing areas such as climate risk and labour relations — are financially material.”

Compliance emerged as a frequently added role under the “other” category for new ESG roles. There is a rising demand for ESG-specific compliance due to increasing regulatory requirements, primarily in the UK and Europe, said Nelson.

There was also a rise in ESG metric reporting. The research found that 66% of managers reported ESG metrics for all funds, an increase from 59% in 2022. Carbon emissions (56%) stood as the top metric, but diversity also showed a rise to 24$ from 19% last year.

Managers globally noted the complexity of integrating ESG information due to diverse client interests. Only US managers cited negative performance repercussions, reflecting ongoing debates on financial materiality in the country.

Nelson said availability of data, lack of standardised reporting by corporations, and meeting the different needs of clients, were key challenges for the industry.

“Nevertheless, fewer managers are reporting that ESG considerations do not affect their investment decisions. Our annual survey shows an upswing in commitments to responsible investing reporting frameworks and initiatives, and our research suggests that ESG has firmly established itself as a lasting force in the investment landscape.”

© 2023 funds europe

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