04.01.2019

Sustainable Investing Assets Have Grown In All Regions

04.01.2019
  • At the start of 2018, global sustainable investment assets reached $30.7 trillion, a 34 percent increase from 2016.
  • Sustainable investment, also known as responsible investment, commands a sizable share of professionally managed assets in each region, ranging from 18 percent in Japan to 63 percent in Australia and New Zealand.
  • Europe accounts for the largest pool of sustainable investment assets with €12.3 trillion ($14.1 trillion) in assets under management, followed by the United States with $12.0 trillion.
  • Negative/exclusionary screening remains the most prevalent sustainable investment approach globally, affecting $19.8 trillion in assets, followed by ESG integration, applied to $17.5 trillion in assets.

Today the Global Sustainable Investment Alliance (GSIA) released its biennial Global Sustainable Investment Review 2018, showing that global sustainable investment assets reached $30.7 trillion at the start of 2018, a 34 percent increase from 2016.

In its fourth edition, the biennial Global Sustainable Investment Review brings together the results from regional market studies by the sustainable investment forums of Europe, the United States, Japan, Canada, and Australia and New Zealand. It also includes data on the African sustainable investing market in cooperation with the African Investing for Impact Barometer and highlights from several countries in North, Central and South America provided by the Principles for Responsible Investment.

The 2018 Global Sustainable Investment Review found that sustainable investing assets have grown in all regions since 2016. Europe accounts for the largest concentration of sustainable investment assets globally, with total assets of €12.3 trillion ($14.1 trillion).  However, the share of Europe’s sustainable investing assets in the region’s overall assets under professional management declined from 53 percent to 49 percent. The slight drop may be due to a move to stricter standards and definitions of sustainable investing.

The United States is the second largest region based on its value of sustainable investing assets. Total US-domiciled assets under management using sustainable strategies grew from $8.7 trillion at the start of 2016 to $12.0 trillion at the start of 2018, an increase of 38 percent.

In Japan, sustainable investing assets quadrupled from 2016 to 2018, growing from just 3 percent of total professionally managed assets in the country to 18 percent. This growth has made Japan the third largest center for sustainable investing after Europe and the United States.

In Canada, sustainable investing assets grew by 42 percent over the two-year period and now account for over 50 percent of professionally managed assets in the country.

Australasia (Australia and New Zealand) is the region with the greatest proportion of sustainable investment assets relative to total assets under management:  63 percent.

The largest sustainable investment strategy globally is negative/exclusionary screening ($19.8 trillion), followed by ESG integration ($17.5 trillion) and corporate engagement/shareholder action ($9.8 trillion). Negative screening remains the largest strategy in Europe, while ESG integration continues to dominate in the United States, Canada and Australia/New Zealand in asset-weighted terms. Corporate engagement and shareholder action is the dominant strategy in Japan.

Norms-based screening has lost ground in Europe, with substantially fewer assets managed under this strategy than in 2016. Despite modest growth in Canada, and more rapid growth in Japan in assets managed under norms-based screening, the global total of these assets fell from 2016 to 2018.

Impact investing is a small but vibrant segment of the broader sustainable and responsible investing universe in all the markets studied. GSIA defines impact investing as targeted investments aimed at solving social or environmental problems. Community investing, whereby capital is specifically directed to traditionally underserved individuals or communities, is included in this category, as is finance that is provided to businesses with an explicit social or environmental purpose.

Source: Global Sustainable Investment Alliance

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