The value of global assets applying environmental, social and governance data to drive investment decisions has almost doubled over four years, and more than tripled over eight years, to $40.5 trillion in 2020.
Analysis of active and passive strategies by research firm Opimas showed that not all products that integrate ESG criteria into their investment strategies are labeled as "ESG" or "sustainable," with non-ESG products also using sustainability data as a source of insight on portfolio companies.
A report of the research said active strategies represent the majority of ESG-related assets under management, at 75% in the U.S. and 82% in Europe.
However, passive ESG strategies captured about 60% of new asset inflows in the U.S. in 2019.
The number of ESG-themed strategies has also skyrocketed over recent years. There were almost 400 ESG strategies launched in the Morningstar investment universe in 2019, compared with around 160 launches in 2016.
Strategy size was also analyzed by Opimas, finding that the overall average size of ESG funds is now around $250 million in AUM. By region, however, size varied, with an average $400 million U.S. strategy AUM, $270 million in Europe and $70 million in Asia.
Opimas also studied ESG indexes, which have fared better over the highly volatile COVID-19-related period than their reference indexes.
Between March 3 and April 16, the Dow Jones Sustainability index returned -8.4%, vs. a -12.4% performance by the S&P Global Broad Market index, the report said. The MSCI KLD 400 Social index returned -9.3% over the same period, vs. parent index MSCI USA Investible Market index performance of -11%.
The size of ESG teams at money managers has also grown across the top 30 money managers, by 229% compared with 2017. Figures were not available.
