Monday 24th October 2016                 Change text size:

Study highlights scale of Europe’s responsible investment

Photo: ALFI

A study by the Association of the Luxembourg Fund Industry has found that some €129.49 billion (£103.48 billion) are invested in 1,236 responsible funds across Europe.

The European Responsible Investment Fund Survey, published last week by the Association of the Luxembourg Fund Industry (ALFI), said this figure represented just 1.6% of the continent’s investment fund market.

The numbers show the majority share that the conventional—and potentially unsustainable—side of the market holds, but notes that there is a positive shift occurring.

ALFI commissioned this study because we believe that responsible investing is not a sector that will come and go in fashion, but it is the start of a tectonic shift that will ultimately create a new landscape and set new norms for the industry”, said Marc Saluzzi, ALFI chairman.

The findings have borne out this belief, with the majority of responsible investment professionals confirming that there is a steady stream of new responsible investing funds.”

The ALFI study, which was conducted by research firm KPMG and released as part of the group’s inaugural Responsible Investing Conference, also found that the responsible investment sector accounts for 2.3% of all European investment funds.

Another trend to emerge from the research is the dominance of environmental, social and corporate governance (ESG) funds, of which there are 704 – more than half of the overall total.

Meanwhile, Luxembourg was revealed as the largest responsible investment fund domicile, with 28% of the total vehicles attributed to the country, just ahead of France.

Thomas Seale, chairman of the ALFI Responsible Investing Technical Committee, said that there were three key action points to come out of the survey.

First, harmonised definitions across the industry are essential, and industry associations across Europe must encourage increased transparency and clarity among their members to improve data gathering.

Second, asset managers should improve disclosure of their responsible investing strategies, related investment products and environmental and social impacts.

Finally, we need to inform the investor community in a more coherent way about the wide array of investment vehicles dedicated to responsible investing.”

A recent survey by Oikocredit showed that there is still a fair amount of misconception in the ethical, sustainable and responsible investment sectors – something that is not helping their growth.

Blue & Green Tomorrow’s Guide to Sustainable Investment is a good place to start considering how your money can make a positive difference to the planet and its people, while continuing to offer prosperity.

Further reading:

The Guide to Sustainable Investment

The ethical investment performance myth

What is socially responsible investment (SRI)?

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