China Stirs Unease for ESG Managers Blindsided by Russia’s War

Caught flat-footed by Russia’s war on Ukraine, fund managers who get paid to avoid environmental, social and governance risks have started to look at China with a fresh sense of unease.

Their exposure to China is huge. Pure ESG funds domiciled just in Europe have about $130 billion invested in China assets, according to data compiled by Bloomberg. A further $160 billion is held by European-based funds that have screened for ESG-related hazards.

And yet the investment industry finds itself starting to contemplate the once unthinkable, as China’s ambiguous response to Russia’s invasion of Ukraine leaves the world on edge. ...