Responsible Investment at $13.6 Trillion; Over 20% of Developed-World AUM

By Kimberly Gladman, CFA, Ph.D., Director of Research and Risk Analytics

This week is an exciting one in the field of responsible investment:  it marks the launch of the Global Sustainable Investment Association,  a network linking the professional associations for responsible investment in Europe, Canada, the US, Asia, and Australasia. The organization's first contribution is a very valuable review of global sustainable investment, which shows that $13.6 trillion - representing 21.8% of assets under management (AUM) in the regions studied - is invested using some kind of responsible investment strategy. This may sound high to investors in the US, where only about 11% of AUM meet that criterion - but the percentage is driven up by the strong commitment to responsible investment in Europe, where nearly half (49%) of all assets are invested using social or environmental factors for security selection, corporate engagement, or both. The global figure will also seem right on track to Canadians, who have 20% of their assets under responsible investment mandates.

Together, Europe, the US, and Canada make up 96% of global sustainable investment activity, with Europe alone accounting for just shy of two-thirds-but there are fascinating developments underway in other markets, including Japan and South Africa. The report provides detailed accounts of trends in each region, which will reward our reading in the weeks to come.

The headline figures, though, should put to rest any lingering impression that responsible investment is a niche market.  Anything affecting one-fifth of AUM in the world's major markets can certainly be considered part of the "mainstream".

Read more articles on corporate governance and other topics at the GMI Blog

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