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Sustainable investments make up more than a third of global wealth

A general view of Siemens Gamesa 2 megawatt (MW) power generating wind turbines on the Kumeyaay wind farm in the Campo Indian Reservation, during the spread of coronavirus disease (COVID-19) in Campo, California, the United States, Jan. REUTERS / Bing Guan // File Photo

  • Total sustainable investments at $ 35.3 trillion – GSIA
  • The number includes retail, wholesale, and institutional assets
  • Also includes assets invested in the ESG integration style

LONDON, July 19 (Reuters) – Sustainable investing amounts to $ 35.3 trillion, or more than a third of all assets in five of the world’s largest markets, a report by the Global Sustainable Investment Alliance showed on Monday.

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

The GSIA, whose constituencies are tracking growth in their region, said professionally managed assets using a broad benchmark for sustainable investment accounted for 36% of total assets under management.

While some industry growth assessments focus on retail funds with a specific sustainability mandate, the GSIA also includes corporate and institutional assets.

The report also includes funds invested using a process that assesses the risk and return impact of issues such as climate change, even if the mandate of the strategy does not have a formal, explicit sustainability focus, known as “ESG integration”.

The biennial industry survey examined assets in the United States, Europe, Australasia, Japan, and Canada, using late 2019 data for all regions except Japan, where the data was through March 2020.

Since the last report, total assets in the markets have increased by 15%, the report said.

“This growth is being driven by rising consumer expectations, strong financial performance and the growing importance of social and environmental issues – from biodiversity to racial justice to climate change,” said Simon O’Connor, chairman of GSIA.

Canada and the United States had the fastest growth over the past two years at 48% and 42%, respectively, the report said.

Reporting by Simon Jessop; Adaptation by Barbara Lewis

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