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Banker to the Ultra-Rich Says War Raises Questions Over ESG Labels

  • Coutts is asking fund managers to prove ESG bets are working
  • War in Ukraine is turning into pivotal moment for the industry
A volunteer clears away rubble from the front of a building in Kharkiv, Ukraine on March 28. 

A volunteer clears away rubble from the front of a building in Kharkiv, Ukraine on March 28. 

Photographer: Chris McGrath/Getty Images

Coutts & Co., the centuries-old wealth manager whose clients include Queen Elizabeth II, said Vladimir Putin’s war on Ukraine is putting pressure on ESG funds to justify their use of the label. 

It’s now clear that hundreds of funds touting environmental, social and governance goals failed to dodge the autocratic regime behind Europe’s worst military conflict since World War II. Funds marketing themselves as ESG held about $8.3 billion in Russian assets right before the war, including state-backed energy giants and even bonds issued by the Kremlin, according to data compiled by Bloomberg.