Asset managers are paying more attention to ESG — environmental, social and governance — concerns, according to a recent report from Northern Trust.

“While many European markets have long made ESG a focus in their investment strategies, other mature markets in parts of North America and Asia have had a less straightforward approach,” Northern Trust reported, although recently Canadian asset managers have moved ahead of the U.S.

“Alongside the pandemic, the summer of 2020 brought a global reckoning with racism, originating in the U.S. with multiple protests and marches. The tumult brought on by the combination of these two events led many investors who had previously not emphasized ESG factors to take a closer look at the positive impact on the world that environmental, social and corporate governance perspectives could bring,” the bank said. “The industry consensus is that the emerging social responsibility emphasis will stick.”

Whether firms will actually practice ESG or merely claim to follow ESG guidelines is another issue. The Wall Street Journal (WSJ) reported that DWS, an asset manager largely owned by Deutsche Bank, is under investigation by the SEC and federal prosecutors for inflating its ESG claims. The asset manager fired its sustainability chief, Desiree Fixler, a day before releasing its annual report which claimed great ESG progress during 2020.

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