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Investors flock to sustainable assets

The global sustainable investment market has grown substantially in recent years, increasing 61 per cent from 2012 to 2014, new research has found.


The Global Sustainable Investment Alliance (GSIA) and the Japan Social Investment Forum have released the findings of a review they conducted of the market titled 2014 Global Sustainable Investment Review.

Within the report the organisations found the global sustainable investment market had grown from US$13.3 trillion at the outset of 2012 to US$21.4 trillion at the start of 2014.

“Sustainable investing represents a significant share of the market not only in Europe, where more than half of professionally managed assets practice an ESG strategy, but also in Australia, the United States and Canada,” a statement from GSIA said.

“Although sustainable investing is not practiced on the same scale in Asia, the growth of interest in investment products that address sustainability challenges such as climate change and resource efficiency is likely to continue.

“In many of these markets, public policy and regulatory changes are underway that could increase the level of corporate disclosure on various environmental, social and governance factors and support shareholder engagement,” it said.

Responsible Investment Association Australia chief executive Simon O’Connor indicated the growth has been driven by increased client demand and a deeper understanding of ESG issues as drivers of investment value.

“Members of the public globally are recognising that their savings can be put to work to deliver a strong, sustainable economy and society, whilst securely growing their retirement nest eggs, and are increasingly asking this of their investment managers,” Mr O’Connor said.

“We anticipate this trend to only strengthen as a key driver of continued growth in responsible investment markets, ever more firmly establishing responsible investment as the benchmark of good investment practice,” he said.

 

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