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ESG assessments rising in asset management, study finds

esg_investingAsset managers see governance as their central ESG factor - but environment and social issues are gaining importance, research shows.

A report by Russell Investments show that out of 400 asset managers surveyed, 78% now incorporate qualitative or quantitative ESG – or environmental, social and governance – factor assessments into their investment processes, an increase of 5% from last year.

Over 80% of asset managers say that governance is the ESG factor which has the most impact on their investment decisions. 

Environmental and social issues are becoming gradually more pronounced in asset managers’ thinking, however. 

The study showed a 4% increase in the number of managers identifying environmental considerations as the factor that most impacts their investment decisions.

Jihan Diolosa, regional head of responsible investing, said: “ESG is no longer an optional ‘add-on’; it is now an essential consideration that asset managers have to incorporate into their decision-making processes.”

Diolosa added that the industry is moving in the right direction. “Asset managers who do not adapt to the changing landscape will be left behind,” she said. 

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