Russell Investments has published the results from its ninth-annual ESG Manager Survey.
The survey includes responses from 169 asset managers that represent $20 trillion in assets under management. Key highlights from the survey are:
75% of participants added dedicated ESG personnel in the past year across various functions such as ESG teams (23%), data integration and analytics (10%), stewardship (9%), and equity investment (7%).
Active ownership has become the top ESG information source. A significant shift was observed, where only 7% claimed that ESG factors do not influence investment decisions, down from 22% in 2022.
ESG considerations such as materiality to reduce security risk (26%), ability to drive positive returns (19%), governance concerns (19%), climate risk (15%), and social risk (15%) prominently shape investment choices.
66% of managers reported ESG metrics for all funds, an increase from 59% in 2022. Carbon emissions (56%) stood as the top metric, followed by diversity statistics which saw a rise (24%, up from 19% in 2022).
Jihan Diolosa, Head of Global ESG Strategy at Russell Investments, says, “We know the road for global ESG integration is not without its challenges, but our survey shows that markets are moving toward integration. From here, it is up to asset managers to translate their commitments into reality and ensure their engagement has the desired impact on industry practices.”
Kris Tomasovic Nelson, Senior Director, Head of ESG Investment Management, Russell Investments, says, “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,” . “Climate risk is at the forefront of investors’ concerns, and we expect ESG to become further rooted in the investment landscape.”
“We’ve observed a rising emphasis on active ownership as an investment tool; indeed, it emerged in this year’s survey as the number one ESG information source,” Nelson said. “Most striking, this year only 7% of respondents said that ESG factors do not drive investment decisions, markedly down from the 22% recorded in 2022. We believe this reflects a deepening recognition that ESG issues — encompassing areas such as climate risk and labor relations — are financially material.”