The Global Sustainable Investment Alliance (GSIA) today released a report on the size and trends within the sustainable investment industry which finds that globally at least US$ 13.6 trillion worth of professionally managed assets incorporate environmental, social and governance (ESG) concerns into their investment selection and management.
The Global Sustainable Investment Review 2012 is collaboration between the Global Sustainable Investment Alliance, AfricaSIF.org, and SIF-Japan, and is the first report to collate the results from the market studies by regional sustainable investment forums from Europe, the United States, Canada, Australia, Asia, Japan, and Africa. The report measures sustainable investments in all asset classes, from public equities and fixed income to hedge funds and microfinance.
The US$ 13.6 trillion worth of professionally managed assets that incorporate ESG concerns into their investment selection and management represents 21.8 percent of the total assets managed professionally in the regions covered by the report, conclusively showing that the sustainable investment industry has significant scale in the global arena.
Europe is the largest region with about 65 percent of the known global sustainable investing assets under management. Europe, along with the United States and Canada, account for 96 percent of SRI assets.
Other key findings include:
- The most common strategy used globally is negative/exclusionary screening, with US$ 8.3 trillion in assets.
- Norms-based screening is also significant at US$ 3.0 trillion, but this approach is currently only found on a large scale in Europe.
- Positive/best-in-class screening stands at just over US$ 1.0 trillion, with the US market contributing most of the global assets invested in positive screening.
- Assets utilizing ESG integration are at US$ 6.2 trillion.
- Approaches to corporate engagement/shareholder action varies greatly across regions, but this is the third-most common strategy, at US $4.7.trillion.
- Impact investing and sustainability themed investments are comparatively small at US$ 89 billion and US$ 83 billion respectively.
- All of the regions expect sustainable investment strategies to expand as increasing numbers of investors realize the value in considering ESG issues and the importance of sustainable investment to risk management and long-term performance.
The release of this report also launches the Global Sustainable Investment Alliance (GSIA) and its website at www.gsi-alliance.org. The GSIA is a collaboration of the seven largest sustainable investment membership organizations in the world: Association for Sustainable & Responsible Investment in Asia (ASrIA ), European Sustainable Investment Forum (Eurosif), Responsible Investment Association Australasia (RIAA), Social Investment Organization (SIO) in Canada, UK Sustainable Investment and Finance Association (UKSIF), US SIF: The Forum for Sustainable and Responsible Investment , and Vereniging van Beleggers voor Duurzame Ontwikkeling (VBDO) in the Netherlands.
The mission of GSIA is to deepen the impact and visibility of sustainable investment membership organizations at the global level. Our vision is a world where sustainable investment is integrated into financial systems and the investment chain and where all regions of the world have coverage by vigorous membership based institutions that represent and advance the sustainable investment community.
The members of the GSIA have worked together for several years to deepen the practice of sustainable investment and the launch today of the Global Sustainable Investment Alliance formalizes our work together. The GSIA Secretariat is housed at US SIF.
Pablo Berrutti, Chair of RIAA’s Board of Directors commented that, “The release of the first Global Sustainable Investment Review and the launch of the Global Sustainable Investment Alliance mark an important milestone for responsible investors globally.
The growth of different sustainable investment strategies around the world highlights that global ESG issues such climate change, resource scarcity, corruption and inequality have relevance for investors everywhere as capital markets and corporate footprints have also become globalised.
By working with our sister organisations under the GSIA banner, RIAA will be able to better represent and support our members on global issues and share ideas and strategies for managing them. We fully expect this partnership will help grow sustainable investment practices in Australia and New Zealand.”