SRI assets now account for $12tr in US

The US SIF Foundation's 2018 biennial report on sustainable, responsible and impact (SRI) investing trends has revealed that SRI assets now account for $12tr, or one in four dollars, of the $47tr in total assets under professional management in the US. This represents a 38 per cent increase over 2016.

Much of the growth is driven by asset managers, with the top three issues for asset managers and their institutional investor clients being climate change/carbon, tobacco and conflict risk, and the largest percentage of money managers citing client demand as the main motivation for pursuing ESG incorporation.

The Trends Report was first compiled in 1995, when assets totalled $639bn – making the sustainable and responsible investing industry having an 18-fold increase in size over 23 years.

“Money managers and institutions are utilising ESG criteria and shareholder engagement to address a plethora of issues including climate change, diversity, human rights, weapons and political spending,” said Lisa Woll, US SIF Foundation CEO. “Additionally, retail and high net worth individuals are increasingly utilising this investment approach with $3tr in sustainable assets.”

The relative prominence of specific ESG criteria differed between money managers (firms that manage assets on behalf of others) and institutional asset owners (entities like pension funds, foundations and educational endowments that own and invest assets, often via money managers).

For asset managers, climate change was the most important specific ESG issue in asset-weighted terms. Other top ESG categories included tobacco, conflict risk, human rights, and transparency/anti-corruption. Concern among money managers and their clients about civilian firearms was also on the rise.

For institutional asset owners, conflict risk was the top specific ESG criteria, up 8 per cent from 2016 to $3tr followed by tobacco, carbon/climate change, board issues, and executive pay.

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