According to the latest data from Bank of America (BofA), global ESG bond fund inflows rose US$11.7 billion (AU$17.6 billion) in the month to February 2023.
Cumulative inflows to ESG bond funds hit an all-time high of US$244 billion (AU$367 billion), up by 12.4 per cent year-on-year.
European markets attracted the lion’s share of ESG bond investment, with inflows up US$5.9 billion (AU$8.8 billion) in February.
In Europe, ESG inflows accounted for 32 per cent of total inflows over the same period — the highest percentage recorded across all regions.
Cumulative inflows rose 14.7 per cent year-on-year to $109 billion (AU$164 billion).
US ESG bond funds attracted $1.3 billion (AU$1.9 billion) over the same period after shedding $757 million (AU$1.1 billion) in December 2022.
The number of ESG funds in the US grew 11 per cent, however, when assessed as a proportion of total investment, ESG accounted for just 2 per cent of total inflows in the year to February 2023.
Meanwhile, across emerging markets, ESG bond funds recorded a monthly inflow of $399 million (AU$600 million) in February, compared to $4 billion (AU$6 billion) in outflows for non-ESG bond funds.
In the year to February 2023, cumulative inflows to ESG bond funds reached an all-time high, rising 16.7 per cent to $21 billion (AU$31.5 billion).
Overall, assets under management (AUM) for global ESG bond funds has increased from US$490 billion (AU$736 billion) in December 2022 to US$495 billion (AU$744.4 billion).
