Sustainable investment is now one third of global capital markets – Global Sustainable Investment Review
Point Advisory was engaged by the Global Sustainable Investment Alliance (GSIA) to write the 2020 Global Sustainable Investment Review. This year’s report reveals an industry that has grown to US$35.3 trillion as it transitions to be more focused on the short- and long-term impacts generated by investors.
In its fifth edition, the biennial Global Sustainable Investment Review 2020 maps the state of sustainable and responsible investment of the major financial markets globally, combining regional data from the United States, Canada, Japan, Australasia and Europe.
This year’s report shows the continuing prevalence of sustainable investment across the global investment industry, with assets under management reaching US$35.3 trillion, a growth of 15% in two years, and in total equating to 36% of all professionally managed assets across regions covered in this report.
The Global Sustainable Investment Review 2020 demonstrates that sustainable investment is a major force shaping global capital markets and in turn is influencing companies and others seeking to raise capital in those global markets.
It also reveals an industry that is in transition, with variations in the scale and growth of sustainable investment in different regions, and rapid developments that are reshaping sustainable investment to increasingly focus on moving the industry towards best standards of practice.
Many regions continue to see strong growth in sustainable investment assets under management – with Canada experiencing the largest increase in absolute terms over the past two years (48% growth), followed by the United States (42% growth), and Japan (38% growth).
Other regions are slowing down their rate of growth or have seen a reported reversal – in particular Europe and Australasia. In both cases, this is largely due to changes in how sustainable investment is defined. In the case of the EU, there’s been a decline in absolute terms over this period (-13%) due to changes in regulatory requirements resulting from the EU’s Sustainable Finance Action Plan while in Australasia, growth has been affected by tightening of industry standards.
The most common sustainable investment strategy is ESG integration, followed by negative screening, corporate engagement and shareholder action, norms-based screening and sustainability-themed investment.
Increasingly, there are expectations that sustainable investment is defined not just by the strategies involved, but by the short- and long-term impacts that investors are having from their sustainable investment approach.
This year’s report includes additional market insights from the United Kingdom, China, Latin America, Africa and other areas of Asia, all showing emerging and unique markets for sustainable investment.
For more information visit www.gsi-alliance.org