The Forum for Sustainable and Responsible Investment, US SIF, has recently released a Report on US Sustainable, Responsible And Impact Investing (SRI) Trends, which shows an increasing importance of ESG investing in the US. The report has been published biennially since 1995 and has recorded a continuous rise in the value of US’s SRI assets held by various institutional investors, money managers and community investing financial institutions as it is now worth around $12.0 trillion which is increased by 38% compared to that in 2016.
According to the report, the key motivation for money managers to incorporate ESG investing is client demand, while the motivations for institutional investors are to fulfill mission and to pursue social benefit.
Furthermore, the report has investigated the ESG criteria of different types of institutions, such as public funds, insurance companies and philanthropic foundations, and it is found that different parties tend to take different ESG criteria into account.
In general, the ESG criterion most valued by asset managers was climate change as its asset amount has been doubled to $3.0 trillion during the period of 2016-2018, and other ESG issues such as tobacco, conflict risk, human rights, transparency/anti-corruption and civilian firearms were also of concern to the asset managers. Regarding the institutional asset owners, conflict risk was considered the key ESG issue as its asset amount was also increased to $3.0 trillion from 2016-2018, while other criteria included tobacco, carbon/climate change, board issues, and executive pay.
According to Lisa Woll, the CEO of US SIF Foundation, there are more money managers and institutions incorporating ESG criteria and engaging shareholders in investing, so that various issues such as climate change and human rights are being addressed, while other parties, including retail and high net worth individuals, are beginning to adopt ESG investing as their investment approach.
Meanwhile, in Hong Kong, the development of SRI and ESG investing remains at a rather slow pace, albeit the rising appetite of investors. It is hoped that increasing investment mandates focusing on ESG could be coming from asset owners, leading to an growing trend of ESG investing in Hong Kong.
Source: https://www.ussif.org/blog_home.asp?display=118
