ESG fund managers increasingly anxious about 'AI blowback'

ESG fund managers who turned to big tech as a low-carbon, high-return bet are growing increasingly anxious over the sector's experimentation with artificial intelligence (AI).

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ESG is short for environment, social and governance.

Exposure to AI now represents a "short-term risk to investors," said Marcel Stotzel, a London-based portfolio manager at Fidelity International.

Stotzel said he's "worried we'll get an AI blowback," which he describes as a situation in which something unexpected triggers a meaningful market decline. "It takes just one incident for something to go wrong and the material impact could be significant," he said.