Assets under management (AUM) at the world’s largest managers declined overall in 2018 as subdued equity markets weighed on the industry, but those managed in Environmental, Social and Governance (ESG) mandates grew substantially.
AUM at the 500 biggest firms fell three per cent during the year but those managed in ESG mandates rose 23.3 per cent, according to new research by the Thinking Ahead Institute (TAI).
Assets are classed as being managed under an ESG mandate if an explicit objective related to ESG is included in the formal mandate.
Although ESG issues have risen to increasing prominence in recent years, the investment industry has repeatedly been hit by accusations of ‘greenwashing’ – giving false or misleading statements about products’ environmental credentials.
Research published earlier this month accused some of the world’s top asset managers of “paying lip service” to ESG.
“Sustainability has now become an unavoidable issue and talk on sustainability is becoming action,” said TAI’s Bob Collie.
“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,” he added.
Blackrock – which has topped the ranking since 2009 – retained its crown as the world’s largest asset manager with $5.98 trillion AUM.
For the fifth year running, Vanguard and State Street complete the top three, with $4.87 trillion and $2.5 trillion AUM respectively.
The research, which was conducted in conjunction with Pensions & Investments newspaper, found that AUM by North American managers declined 4.9 per cent, while those in Europe fell 3.9 per cent.
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