The global sustainable investment industry is worth $13.6 trillion (£8.6 trillion) and represents 21.8% of assets under management, according to a report by the newly-launched Global Sustainable Investment Alliance (GSIA).
The GSIA, which is a collaboration between seven of the world’s largest investment forums, said some 65% of this total is invested in Europe, while a further 31% can be found in the US and Canada.
The most popular method of investment that encompasses environmental, social and governance (ESG) concerns is negative screening – which involves excluding certain sectors and organisations and accounts for $8.3 trillion (£5.3 trillion) of the total.
Norms-based screening, where investments have to specifically abide by ESG guidelines set by such bodies as the UN, and positive screening, which focuses on investing in ‘good’ industries that are actively tackling sustainability challenges, were found to make up $3 trillion (£1.9 trillion) and $1 trillion (£636 billion) respectively.
Penny Shepherd, chief executive of the UK Sustainable Investment and Finance Association (UKSIF) – a member of GSIA, said, “Drawing on the knowledge and expertise of our sister organisations through the alliance and working more closely with them at a global level will enable UKSIF to strengthen its support for the UK finance sector’s leadership in advancing sustainable development and delivering long-term value for global clients.”
Sustainable investment member organisations from Europe, Asia, Australasia, Canada, the Netherlands and the US also make up the GSIA, which is being run from the US Forum for Sustainable and Responsible Investment (US SIF).