Report says SRI assets reach $4 trillion

Canada and Australia report boom in responsible analysis.

Responsible investment analysis now accounts for about $4 trillion (€2.9bn) of all assets being managed globally, according to calculations made by EIRIS, the UK environmental, social and governance (ESG) research house.
In a new report, titled: “The State of Responsible Business”, EIRIS said it had pooled information from social investment forums funds in the US, Canada, Europe and Australia and New Zealand, to reach the figure, which indicates the value of assets where analysis of ESG issues is added to the investment process.
The report said responsible investment was most common in Europe, followed by North America and then Australia and New Zealand. It recorded consistently growing interest since the turn of the century in Japan and a jump in assets in emerging markets following the recent launch of new funds.
Notable rises in ESG analysis have occurred in Canada where the country’s Social Investment Organisation (SIO) reported that the value of assets managed responsibly rose by 570% from 2004 to 2006 to reach Can$504bn by June 30, 2006.
In Australia, responsible investment portfolios have grown by a staggering 3,587% between 2000 and 2006 from US$325m to US$11.98bn.In emerging markets, EIRIS said responsible investment was growing fastest in South Africa, Brazil and Asia.
EIRIS said shareholder activism in particular had risen significantly in the last five years. According to the research house, it is not uncommon that as many as 30% of the shareholders in listed companies in well developed ESG markets will actively vote their shares at general meetings on issues of global warming. This compares to around 3% of shareholders that tend to actively vote on non-ESG issues. It said that pressure groups, unions and other non-governmental organisations had been instrumental in bringing ESG issues to the attention of investors.
EIRIS, which started 25 years ago, said it had seen the topic of corporate social responsibility evolve from a mainly philanthropic activity to a mainstream approach integrated into core company business practices.
However, it said there were still significant geographic differences in the take up by companies. Again, Europe leads the way, markedly ahead of US companies, according to EIRIS. It said Japanese companies showed strong performance on environmental issues but still had ground to make in other social and governance areas.
Larger companies are also more likely than smaller firms to adopt ESG principles, particularly regarding human rights and the environment.