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ESG mandates buck trend of declining growth

ESG investingAssets managed under environmental, social and governance (ESG) criteria are bucking the trend of declining growth amongst the world’s largest asset managers.

Despite the downward trend in assets under management (AuM) of the largest firms in 2018, ESG mandates increased by 23.3%, according to a report by Willis Towers Watson’s Thinking Ahead Institute released this week.

Overall AuM, on the other hand, were down 3% from the previous year, the study of the top 500 fund managers found.

Bob Collie, head of research at the Thinking Ahead Institute, said: “Sustainability has now become an unavoidable issue and talk on sustainability is becoming action.”

“There is obviously a saying-doing gap in a lot of places, but perhaps more important right now is the doing-impact gap: our ability to create a more sustainable economy lags behind the desire. The most meaningful efforts on this front are the ones focused on closing that gap.”

Client interest in sustainable investing, including voting, increased across 83% of the 500 firms, according to the study.

The report also found that 242 names featuring in the top 500 asset managers list in 2008 had disappeared from the 2018 study. 

“The regulatory burden on the industry is a symptom of a lack of trust. Rebuilding that trust means more focus on the long term. Without a clear sense of purpose, you can end up being just another one of 500 firms fighting for elbow room in an ever-more-challenging environment,” Collie said.

Over 80% of fund managers said they had increased resources focused on technology and big data, whilst 57% said they had experienced an increase in the level of regulatory oversight.

With nearly $6 trillion (€5.4 trillion) of assets, BlackRock remained the largest fund manager, followed by Vanguard Group ($4,866,61), and State Street Global ($2,511,297). 

Read Funds Europe’s latest ESG report here.

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