Sustainable investment strategy trend dominant globally

25 February 2015

Sustainable investment assets have grown 61 per cent since 2012 and have globally reached US$21.4 trillion ($27.3 trillion), according to a report by the Global Sustainable Investment Alliance (GSIA).

This sustainable trend found across the US, Europe, Australia, New Zealand, and Asia where environmental, social and governance (ESG) factor integration is now dominant in investment strategy.

In Australia the share of the market practicing ESG strategy is 16.6 per cent and investments in core responsible investment grew by 30 per cent in a year to over US$22 billion in managed assets at the start of 2014, the report said.

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"The two key drivers here are rapidly growing client demand for these products, as well as the increasing understanding that environmental, social, and governance issues are ever more critical drivers of investment value," Simon O'Connor, CEO of the Responsible Investment Association Australasia, said.

"We anticipate this trend to only strengthen as a key driver of continued growth in responsible investment markets, ever more firmly establishing responsible investment as the benchmark of good investment practice."

The report covering ESG factors in portfolio selection and management measured sustainable investments in all asset classes, from public equities and fixed income to hedge funds, microfinance and impact investments.

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