Thornburg Investment Management Portfolio Manager Charlie Wilson in MarketWatch


Russia’s invasion of Ukraine is changing ESG investing

More scrutiny of governance-related issues

Socially responsible investing in emerging markets was never easy, but Russia’s invasion of Ukraine has investors reassessing how to rate emerging markets on environmental, social and governance grounds.

A number of ESG emerging-market exchange-traded funds had Russian holdings just as the war began in late February, according to Morningstar data. Among them were the $6.3 billion iShares ESG Aware MSCI EM ETF ESGE, -1.08%, the $3.2 billion WisdomTree Emerging Markets ex-State Owned Enterprises ETF XSOE, -1.15% and the $702 million Xtrackers Emerging Markets Carbon Reduction & Climate Improvers ETF EMCR, -0.80%. Like non-ESG funds, these ETFs fell sharply as investors sold Russian assets.

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