Studies show continued growth in impact investing

Every week there seems to be another study about ESG or impact investing.  Here are some recent facts and figures…

  • According to Morningstar, investors put $3 billion in U.S. ESG funds last year.
  •  Sustainable investing had a market size of $8.72 trillion in the U.S. in the beginning of 2016, representing 22% of all investments under management. Sustainable investing grew 33% in the U.S. during the period from 2014 to 2016, from $6.57 trillion in 2014 to $8.72 trillion in 2016. SRI investing accounts for more than one out of every five dollars under professional management in the US. (USSIF)
  •  Signatories to the UN PRI (United Nations Principles for Responsible Investment) represent approximately $70 trillion in AUM.
  •  In 2016, 1,002 funds, with $2.6 trillion in assets, incorporated ESG criteria into their investment decision making, up from $1.01 trillion in 2012, according to the 2016 report from the U.S. SIF Foundation: The Forum for Sustainable and Responsible Investment. In 2016, 36 mutual funds with SRI mandates were launched in the U.S., a 38 percent increase over 2015. Inflows to the space far outpaced new fund launches: Investors poured $5.8 billion into SRI strategies in 2016, almost three times as much as they did in 2015, according to Morningstar.
  •  According to EPFR Global, from the beginning of the year to June 21, investors funneled over $5.4 billion into SRI/ESG graph


 Despite the size and growth in impact investing, advisors are still reluctant to talk about ESG as an investment strategy.

  • AllianzGI ESG Clarity Survey found that a majority (65%) seniors aged 65 and older consider ESG a sound investment strategy, but only 20% are currently invested in ESG strategies. The lack of active impact investing largely may be attributed to their financial advisors.  The survey noted that only 14% of respondents discussed ESG strategies with their advisor.  Further, of those that discussed ESG investing, nearly two-thirds, (61%) brought it up themselves. 

Client demand for impact investment strategies among asset classes will continue to grow as investors recognize that they can deploy their capital in people and places with purpose.