Nearly half of asset managers don't base any sell orders on ESG, survey shows

Steam rises from chimneys on a cold day in Moscow, Russia, January 18, 2021. REUTERS/Shamil Zhumatov

LONDON, Sept 27 (Reuters) - Forty-three percent of asset managers were unable to provide an example of a sell decision driven by a view on environmental, social and governance issues in the last 12 months, a larger proportion than last year, a survey showed on Tuesday.

Thirty-five percent could not show they'd made a buy decision based on ESG, up from 26% a year ago, according to the survey of 122 asset managers managing $37.7 trillion by investment consultants Redington.

Last year's survey found 39% of managers didn't make a sell decision based on ESG.

Asset owners such as pension funds are putting pressure on investment managers to play their part in helping the world meet net zero climate targets, while regulators are applying more scrutiny.

But the asset managers have also been accused of "greenwashing" - failing to live up to their declared ESG standards. read more

"Asset managers have got the policies in place, they've hired the staff, the messaging is pretty strong," said Nick Samuels, head of manager research at Redington.

"They're able to evidence they've thrown money at the problem, but that's when a large proportion of them start to fall down."

Some fund managers have become more willing to invest in fossil fuels this year, he added, as a European energy crisis has pushed up the value of those assets.

The proportion of firms aligning remuneration policies with sustainable investment metrics fell to 62% from 70% in the 2021 report.

Company executives should have their bonuses linked to performance on ESG issues to incentivise change, Samuels said.

The survey was carried out between May and July 2022, Redington said.

Reporting by Carolyn Cohn, Editing by William Maclean

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