Morningstar has compiled a report that sees China as the new second-biggest climate investment market after Europe.

Climate funds domiciled in China hit a high of $46.7bn, a 149 per cent increase on 2020 figures according to the report. US climate fund assets grew by 45 per cent to $31 billion in 2021, by comparison.

Europe remains the largest climate funds market, accounting for more than three quarters of global assets ($325bn).

Morningstar had identified as many as 860 mutual funds and exchange-traded funds (ETFs) with climate mandates by the end of 2021, with assets doubling throughout the year to $408bn as product developments and new regulations bit.

"Fund investors globally have a growing number of choices to mitigate climate risk in their portfolios and invest in climate opportunities," report author and Morningstar global director of sustainability research Hortense Bioy said.

However, the report notes that concerns still remain over the consistency of available data, and how data can align to standards of reporting, with measures such as the EU’s taxonomy being criticised, especially in light of the current global situation.

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