Socially Responsible Investments Rising Globally: GSIA Report
(3BL Media/Justmeans) – The market share of sustainable investing has grown across almost all regions of the world since 2014. Globally, there are now $22.89 trillion of assets being professionally managed under responsible investment strategies, representing an increase of 25 percent over two years. Clearly, sustainable investing now constitutes a major force across global financial markets.
This encouraging global investment trend is the focus of the newly published biennial Global Sustainable Investment Review 2016 by the Global Sustainable Investment Alliance (GSIA). The report brings together the results from regional market studies by the sustainable investment forums from the US, Europe, Asia, Canada, Australia and New Zealand.
In nearly every market represented in the report, sustainable investing grew in both absolute and relative terms since the beginning of 2014. Europe accounts for 53 percent of the global socially responsible investment (SRI) assets, and the US for 38 percent. The fastest growing region is Japan, followed by Australia and New Zealand.
The largest sustainable investment strategy globally is negative/exclusionary screening ($15.02 trillion), followed by ESG integration ($10.37 trillion) and corporate engagement and shareholder action ($8.37 trillion).
Negative screening is the largest strategy in Europe, while ESG integration leads in the US, Canada, Australia, New Zealand and Asia ex Japan. Japan’s primary sustainable investment strategy is corporate engagement and shareholder action. The fastest growing strategy, though also the smallest in absolute dollar terms, was impact and community investing.
While institutional investors still dominate the SRI market, interest by retail investors is growing. The relative proportion of retail SRI investments in Canada, Europe and the US increased from 13 percent in 2014 to 26 percent at the start of 2016. Over a third of SRI assets in the US were retail.
Growing global concern over climate change has resulted in rising interest in green finance, including climate-aligned bonds. In 2016 in Canada and Europe, most SRI assets were in bonds (64%) followed by equities (33%). China is another important contributor to the rise in green bonds as China is now the world’s largest issuer of climate-aligned bonds, with $220 billion in issuances, according to the Climate Bonds Initiative.