Asset managers to begin downplaying ‘ESG’ abbreviation

 

By Adam Cadle

 14/02/24

Asset managers are to begin downplaying the abbreviation ESG in favour of similar, “but less controversial” terms like “stewardship”, Coalition Greenwich has said.

In its Top Trends in Asset Management for 2024 report, Coalition Greenwich said the ESG label is drawing fire in the US, particularly with new state laws banning the use of ESG criteria by some state entities, and is also now taking on a much more prescribed, legal meaning in Europe.

“Developing a universally acceptable approach to ESG will be a critical strategic priority for any asset managers operating across these regions,” the Coalition Greenwich added.

“For that reason, in 2024, we expect growing numbers of asset managers to seek out a middle path that enables them to meet the expectations and requirements of institutional investors who have implemented ESG into their investment processes and portfolios, while also demonstrating strict adherence to fiduciary responsibility.”

When asked about the differentiators influencing decisions to work with asset managers in an ESG capacity, 33 per cent of institutional investors said it is very influential if a manager has robust stewardship or active ownership policies and practices in place.

This story was originally published on our sister title, Insurance Asset Management.