Sustainable investment assets globally grew 15% over the past two years to reach $35 trillion, according to the Global Sustainable Investment Review 2020 released Monday.
With 36% of all professionally managed assets now sustainable assets, "sustainable investing has really become a major force across global capital markets," said Simon O'Connor, chairman of the Global Sustainable Investment Alliance, during a news briefing call about the report from the GSIA and US SIF: The Forum for Sustainable and Responsible Investment.
The report defines sustainable investment as investment approaches that consider environmental, social and governance factors in portfolio selection and management across seven strategies of sustainable or responsible investment, the most common being ESG integration, followed by negative screening, corporate engagement and shareholder action, norms-based screening and sustainability-themed investment.
The biennial report found that at the start of 2020, the U.S. and Europe dominated, with 80% of sustainable assets there. Canada's market had the highest proportion of sustainable investment assets at 62%, followed by Europe at 42%, Australasia at 38%, the U.S. at 33% and Japan at 24%.
Not all countries are trending upward. "Sustainable investing is now at a really interesting point of transition. There's is now a great deal of variation," said Mr. O'Connor, who is also CEO of the Responsible Investment Association Australasia.
Some of the fastest growth rates over the past two years occurred in Canada with 48% growth, followed by the U.S. at 42%, Japan at 34% and Australia at 25% growth from 2018 to 2020.
Other markets are slowing down, but in the case of Europe and Australia, some decline is attributed to tightening of industry standards and measurement methodology, not less activity, Mr. O'Connor said.
The GSIA represents sustainable investment membership organizations in Australasia, Canada, the European Union, Japan, the Netherlands, the U.K. and the U.S.
