Vanguard, Northern Trust ESG Funds Added Russia Bets Before War

As Vladimir Putin amassed military forces on Ukraine’s borders in January, Vanguard Group and Northern Trust Corp. increased their holdings in Russia’s leading bank via some unlikely portfolios: their ESG funds, which invest with a mandate to minimize “environmental, social and governance” risks.

Big asset managers, including Blackrock Inc., State Street Corp. and Amundi SA, also hold shares via ESG funds in Sberbank PJSC, and in Russian oil companies Gazprom PJSC and Rosneft PJSC, according to data compiled by Bloomberg. In total, ESG funds held at least $8.3 billion in Russian assets before Putin invaded Ukraine.

The Northern ...