With some $13.6 trillion of the invested assets evaluated by the Global Sustainable Investment Alliance (GSIA) now incorporating environmental, social and corporate governance (ESG) analysis, the integration of ESG considerations into active portfolios seems to be gaining steam. Our thesis is that positive ESG tilting among active managers will indicate an implicit endorsement of the consistency between ESG factors and value creation. Russell’s experience in evaluating security selection among active equity managers is that these tilts are not engineered, but rather are byproducts of ESG-agnostic processes; i.e., they are not intentional.

This Russell Viewpoint explores the relationship between ESG tilts and adding value through active security selection.

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