ESG Funds Get ‘Brutal Wake-Up Call’ on Russian Bond Holdings
- Asset managers hold the bonds with default risks looming
- ESG offerings own a fraction of the total $40 billion of debt
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Some of the roughly $40 billion in Russian foreign-currency debt now at risk of default is held by a group of ESG funds that are designed to invest in so-called sustainable assets.
The Article 8 funds -- a category under Europe’s environmental, social and governance investing rules -- hold about $800 million of bonds issued by the government of Vladimir Putin that have a coupon payment due this week, according to data compiled by Bloomberg.