By the Numbers: Growth in ESG assets
George Moriarty, chief content officer at InvestmentNews, discusses the rapid expansion in investments that follow sustainable guidelines, which now make up a third of all professionally managed assets in the U.S.
Transcript:
I’m George Moriarty and this is By the Numbers.
Today, we’re going to discuss ESG, and the number of the day is HUGE – 17.1 trillion with a T.
A new report from The Forum for Sustainable and Responsible Investment shows assets following sustainable guidelines now represent a third of all professionally managed U.S. investments.
Landing at $17.1 trillion, that represents a 42% increase in sustainable assets from 2018 when the total was $12 trillion. And it’s a 25-fold increase from where the assets were in 1995.
Over the past 25 years sustainable assets have racked up a 14% compound annual growth rate.
The US SIF report separates the assets to show that institutional investors manage more than $12 trillion to incorporate environmental, social and governance factors, while $4.6 trillion is managed for retail investors.
More than $2 trillion of the total is attributable to shareholder resolutions, with some of the managed assets incorporating ESG strategies and also counted under shareholder resolutions.
A look at the money managers shows that one third cited ‘managing risk’ as their top motivation for incorporating ESG.
When you look at the investing themes or criteria the ESG investments are focused in, the top two are conflict risk, including terrorism, and climate change.
That’s it for today. I’m George Moriarty, and from my home office to yours, stay safe and be well.
See also: ESG assets expected to top $53 trillion by 2022: Celent – Social, economic and market factors are accelerating investor appetite for a more sustainable approach to investing
