Sustainable investments account for about one third of global assets

Sustainable investments total $35.3 trillion, or more than a third of all assets in five of the world’s biggest markets, a report from the Global Sustainable Investment Alliance on Monday showed.

Investors are increasingly driven by environmental, social and governance-related (ESG) factors that traditionally have not been captured in a company’s balance sheet, but that can influence future returns.

The GSIA, whose member bodies track growth in their region, said professionally managed assets, using a broad gauge of what it means to invest sustainably, account for 36 per cent of total assets under management.

While some assessments of industry growth focus on retail-focused mutual funds with a specific sustainability mandate, the GSIA also includes wholesale and institutional assets.

Since the last report, total assets across the markets had risen 15 per cent, the report said.

“This growth is being fuelled by rising consumer expectations, strong financial performance and the increasing materiality of social and environmental issues – from biodiversity to racial equity to climate change,” Simon O’Connor, chair of the GSIA, said.