The Global Sustainable Investment Alliance (GSIA) released
its biennial Global Sustainable Investment Review 2018, showing that global sustainable, responsible and impact investment assets reached US$30.7 trillion at the start of 2018, a 34 percent increase from 2016.
Sustainable Investments by Region
The report found that sustainable investing assets have grown in all regions except Europe.
While Europe accounts for the largest concentration of sustainable investment assets globally, with total assets of €12.3 trillion ($14.1 trillion), Europe’s share of the overall market declined from 53 percent to 49 percent of total professionally managed assets. The slight drop may be due to a move to stricter standards and definitions of sustainable investing.
The United States is the second largest region based on its value of sustainable investing assets. Total US-domiciled assets under management using sustainable strategies grew from $8.7 trillion at the start
of 2016 to $12.0 trillion at the start of 2018, an increase of 38 percent.
In Japan, sustainable investing assets quadrupled from 2016 to 2018, growing from just 3 percent of total professionally managed assets in the country to 18 percent. This growth has made Japan the third largest center for sustainable investing after Europe and the United States.
For the first time, Australasia (Australia and New Zealand) is the region with the greatest proportion of sustainable investment assets relative to total assets under management, with 63% of assets in Australasia using a responsible investment approach.
Sustainable Investments by Strategy
The largest sustainable investment strategy globally is negative/exclusionary screening ($19.8 trillion), followed by ESG integration ($17.5 trillion) and corporate engagement/shareholder action ($9.8 trillion).
Negative screening remains the largest strategy in Europe, while ESG integration continues to dominate in the United States, Canada and Australia/New Zealand in asset-weighted terms. Corporate engagement and shareholder action is the dominant strategy in Japan.
Norms-based screening has lost ground in Europe, with substantially fewer assets managed under this strategy than in 2016. Despite modest growth in Canada, and more rapid growth in Japan in assets managed under norms-based screening, the global total of these assets fell from 2016 to 2018.
Impact investing is a small but vibrant segment of the broader sustainable and responsible investing universe in all the markets studied.