ESG In Asset Management: Breaking The Glass Ceiling


Chitra Baskar, Chief Operating Officer and Global Head of Funds & Product at Intertrust Group.

ESG has steadily climbed to the top of the investing agenda, with women playing a pivotal role in driving its popularity. What does this mean for women within the fund management industry?

The inexorable rise of ESG investing has revolutionized the asset management industry in recent years. According to the Global Sustainable Investment Alliance, ESG assets hit $35.3 trillion in 2020, 36% of all assets under management, and in 2021, Bloomberg Intelligence estimated that this number would rise to $50 trillion by 2025. Who is behind this exponential rise in popularity?

Women: Driving The Rise Of ESG

According to a study conducted by RBC Wealth Management last year among its U.S. client base, women are leading the charge. The firm’s female clients were “more than twice as likely as men to say it is extremely important that the companies they invest in integrate ESG factors into their policies and decisions.” This sentiment was recently echoed in a UBS Investor Sentiment Survey, which found that 71% of women take sustainable considerations into account when investing, compared to 58% of men.

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With more money to invest than ever before and an inclination toward choosing ESG-focused funds, women are playing a key role in encouraging asset managers to integrate ESG into their investment processes.

Practicing What You Preach

Not only is the fund management industry under increasing pressure to embrace ESG in its strategy and products, but it is also expected to practice what it preaches, including when it comes to diversity.

Gender inequalities have been notoriously persistent in the financial services sector, but recent years have seen a major focus on addressing these—especially given the proven financial benefits of gender diversity. Goldman Sachs recently found that funds led by all-women teams or mixed-gender teams performed better than all-male-led funds, for instance.

Although female representation still falls short of expectations, wealth and asset managers now have the highest percentage of women at the boardroom level in the financial services industry, and the number of women in senior leadership roles in the asset management industry has increased—including in ESG roles. Indeed, HFObserver reported that women accounted for 49.6% of ESG hires (subscription required) in 2020 and 2021.

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At my own company, female colleagues account for nearly half of total staff, and over a third of them are in management positions. In the funds team specifically, maintaining and improving diversity and inclusion is an ongoing strategy.

ESG As A Career Opportunity For Women

With women more likely to invest according to their values, ESG roles have long attracted female candidates. Now that ESG has graduated from a position of secondary importance in the asset management industry to dominate the business agenda, it represents a tremendous career opportunity for women—amplifying their voice in what is still a male-dominated industry.

More women in coveted ESG fund management roles will inevitably shape the future of ESG investing. Gender lens investing, for example, will likely gain traction.

What Is Gender Lens Investing?

Gender lens investing is an investment strategy that looks to close the gender gap, which the World Economic Forum defines as “the difference between men and women as reflected in social, political, intellectual, cultural, or economic attainments or attitudes.”

As highlighted by Global Impact Investing Network, closing the gender gap through investing can mean either investing in promoting gender equity—e.g., investing in women-owned enterprises or businesses that improve the lives of women—or integrating gender considerations into the investment process itself, from pre-investment activities (e.g., sourcing and due diligence) to post-deal monitoring (e.g., strategic advisory and exiting). Even if they don’t call it gender lens investing, female investors are more likely to invest in female-founded companies.

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With Covid-19 amplifying the severity of social and economic issues, including inequality and increasing female representation in the fund management industry, gender lens investing is only set to increase.

Coming Full Circle

By playing a pivotal role in the rise of ESG, women are, in turn, creating more opportunities for women in the fund management industry, which is under increasing pressure to increase its gender diversity. With their unique propensity for ESG, female fund managers are grasping this opportunity with both hands and ultimately serving as a force for good within the industry and beyond.


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