Sustainable assets reached $30.7tr, but Europe lags

The Global Sustainable Investment Alliance (GSIA) has released its biennial investment report, showing that globally sustainable investment assets reached $30.7tr at the start of 2018, a 34 per cent increase from 2016.

The 2018 Global Sustainable Investment Review notes that sustainable investing assets have grown in all regions except Europe. While Europe accounts for the largest concentration of sustainable investment assets globally, with total assets of $14.1tr, Europe’s share of the overall market declined from 53 per cent to 49 per cent of total professionally managed assets.

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

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

For the first time, Australasia (Australia and New Zealand) is the region with the greatest proportion of sustainable investment assets relative to total assets under management, with 63 per cent of assets in Australasia using a responsible investment approach.

The largest sustainable investment strategy globally is negative/exclusionary screening ($19.8tr), followed by ESG integration ($17.5tr) and corporate engagement/shareholder action ($9.8tr). Negative screening remains the largest strategy in Europe, while ESG integration continues to dominate in the US, 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.

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