Global sustainable investments hit $35.6tn as investors focus on ESG integrations

By Amirtha P S, Desk Reporter
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A new report from the Global Sustainable Investment Alliance (GSIA) shows that the total sustainable investments are valued at $35.3 trillion which is equal to more than a third of all assets in five of the world’s biggest markets.

The Global Sustainable Investment Review published by the GSIA maps the state of sustainable and responsible investment of major financial markets globally, combining regional data from the US, Canada, Japan, Australasia and Europe.

Over the past years, the investors are being increasingly driven by environmental, social and governance-related (ESG) factors that traditionally have not been captured in a company’s balance sheet, but that can influence future returns.

The GSIA, whose member bodies track growth in their region, said professionally managed assets, using a broad indicator of what it means to invest sustainably, account for 36 percent of total assets under management.

While some assessments of industry growth focus on retail-focused mutual funds with a specific sustainability mandate, the GSIA also includes wholesale and institutional assets.

The report also includes money invested using a process that assesses the risk and returns impact of issues, like climate change, even if the strategy’s mandate does not have a formal, explicit sustainability focus, so-called ‘ESG integration’.

The biennial industry survey looked at assets in the US, Europe, Australasia, Japan and Canada, using data from end-2019 for all regions except Japan, where the data was to end-March 2020. Since the last report, total assets across the markets had risen 15 percent, the report said.

“This growth is being fuelled by rising consumer expectations, strong financial performance and the increasing materiality of social and environmental issues, from biodiversity to racial equity to climate change,” Mr. Simon O’Connor, chair of the GSIA, stated.

Canada and the US saw the strongest growth over the last two years, the report said, at 48 percent and 42 percent, respectively.

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