Market Commentary
ESG market tops $100 trillion
InvestorDaily
Global money invested in ESG assets soared to over US$100 trillion amid the pandemic, but as the market becomes increasingly sophisticated, fund managers will need to do more than simply releasing a vanilla ethical offering, according to new research. Addressing the InvestorDaily ESG Summit 2021, CoreData principal Andrew Inwood said ESG investing had “never been more exciting than it has been in the past 12 months”, with increasing global tax incentives for green investing pushing more funds into the sector as investors searched for new opportunities in a low-interest rate world. CoreData research indicated funds invested under the UN Principles for Responsible Investing had soared from US$6 trillion in 2006 to US$103 trillion in 2020, with more than half of global institutional investors now fully integrating ESG into their investment approach.
“The low inflation environment means the way money is moving around has started to change. While returns are low, people are looking for opportunities and people inside the ESG market have been outperforming,” Mr Inwood said. “While that’s happening, money is starting to shift into the space where people are chasing better opportunities and picking up trends that are impacted positively by taxation structures.” Only the US market had so far lagged in ESG take-up, with only 30 per cent of institutional investors fully integrating it into their strategies, but Mr Inwood said this was likely to change with the new Biden administration.
The rest of this article can be found at investordaily.com.au.
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