What is being termed sustainable, responsible and impact (SRI) investing assets have grown to $8.72trn (€8.1trn) in the US – up 33% from $6.57trn in 2014 – according to a new report from the US SIF Foundation.
It said a lot of the growth is driven by asset managers, who now consider environmental, social or corporate governance (ESG) criteria across $8.10trn of assets – a 69% increase over two years ago.
The figures come in the Washington, DC-based body’s latest biennial report on industry trends. It has been reporting since 1995, when ESG assets totalled $639bn.
The report follows a similar study from its European peer Eurosif last week which found “double-digit growth” for SRI.
But it comes after the unexpected election of Donald Trump to the US presidency which has sent shock waves through the SRI sector in the country, concerned over his stance on climate change, corporate governance and equality. One industry veteran Zevin Asset Management founder Robert Brooke Zevin spoke of “despair and foreboding”.
But the sector seems in rude health in terms of assets under management, with the US SIF Foundation saying demand is coming from individual and institutional clients, growing market penetration of SRI products, the development of new products that incorporate ESG criteria and the incorporation of ESG criteria by numerous large asset managers across wider portions of their holdings.“The trend of robust growth in sustainable and impact investing is continuing as investment managers apply ESG criteria across broader portions of their portfolios, often in response to client demand,” said Lisa Woll, US SIF Foundation CEO. “Asset managers, institutional investors, advisors and individuals are moving toward sustainable and impact investing to advance critical social, environmental and governance issues in addition to seeking long-term financial returns.
“A diverse group of investors is seeking to achieve positive impacts through such strategies as shareowner engagement or investing with an emphasis on addressing climate change, corporate governance, and human rights including the advancement of women.”
The report said asset managers are incorporating ESG factors because of client demand (85%), mission (83%), risk (81%), returns (80%), social benefit (78%), fiduciary duty (64%) and regulatory compliance (22%).
The US SIF Foundation and researchers at the Croatan Institute distributed an online information request to money managers and institutional investors from March through August 2016. The research team also reviewed annual reports, financial statements, SEC filings and gathered data from third-party providers and trade associations.
The report is based on research of the SRI activities of 797 money managers and 1,660 institutional investors. Link