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Behavior Change
Report:
Global Sustainable Investing Market Surpasses $21 Trillion

The global sustainable investment market has grown “substantially” in the past two years with assets reaching $21.4 trillion by the start of 2014, according to a new report by the Global Sustainable Investment Alliance (GSIA).The Global Sustainable Investment Review 2014 finds that the assets employing sustainable investing strategies have risen from 21.5 percent to 30.2 percent of the professional management assets across the regions covered.

The global sustainable investment market has grown “substantially” in the past two years with assets reaching $21.4 trillion by the start of 2014, according to a new report by the Global Sustainable Investment Alliance (GSIA).

The Global Sustainable Investment Review 2014 finds that the assets employing sustainable investing strategies have risen from 21.5 percent to 30.2 percent of the professional management assets across the regions covered.

Sustainable investing represents a significant share of the market in Europe — where more than half of professionally managed assets practice an environmental, social and governance (ESG) strategy. The same holds true in Australia, the United States and Canada, where its share of the market ranges from 17 to 31 percent.

The majority (64 percent) of the identified global sustainable investment assets are from Europe. Together, Europe, the United States and Canada account for 99 percent of global sustainable investing assets.

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Although sustainable investing is not practiced on the same scale in Asia, the growth of interest in investment products that address sustainability challenges such as climate change and resource efficiency is likely to continue, the report says.

The most common sustainable investing strategy used globally is negative/exclusionary screening, affecting $14.4 trillion in assets. The second most prominent strategy in asset terms is ESG integration — the systematic and explicit inclusion by investment managers of ESG factors into traditional financial analysis, which affects $12.9 trillion. The third most prominent strategy is corporate engagement and shareholder actions — the use of shareholder power to influence corporate behavior — which affects $7 trillion.

The report says impact investing is a small but vibrant segment of the broader sustainable investing universe in all the markets studied. Conservation impact investing totaled approximately $23 billion in the five-year period from 2009 to 2013, according to a separate report released late last year by EKO Asset Management Partners and The Nature Conservancy’s NatureVest division.

In many of these markets, public policy and regulatory changes are underway that could increase the level of corporate disclosure on various ESG factors and support shareholder engagement.

Sustainable investment is growing, but still faces many challenges.

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