Assets under management in European responsible investment funds now total €237.9 billion (£201 billion) – a 19% increase since 2010 – according to a survey by the Association of the Luxembourg Fund Industry (ALFI).
The European Responsible Investment Fund Survey, published by accountancy giant KPMG on behalf of ALFI, found that the proportion of responsible investment assets compared to the total had increased by 1.6%.
The survey shows that investments into carbon reduction, social, microfinance and ethical funds had increased since 2010, but that investments into environmental funds (ecological, climate change, water and renewable energy) had dropped by 10.5% to €28.1 billion (£23.8 billion).
The combined effects of the financial crisis and a lack of an international commitment in tackling climate change were highlighted as the root cause of this drop-off.
“This report, together with [Luxembourg regulator the Commission de Surveillance du Secteur Financier (CSSF)] figures on microfinance and Sharia funds, indicates solid growth rates in responsible investing”, said Thomas Seale, chairman of ALFI.
“However, it also shows that we are facing a series of challenges in the areas of [environmental, social and governance (ESG)] integration, distribution and transparency. The industry needs to work to overcome these challenges if we are to move responsible investing from niche to mainstream.”
A recent study by German sustainable investment trade body Forum Nachhaltige Geldanlagen (FNG) revealed that investment into sustainable funds now exceeded €34 billion (£29 billion) in Switzerland, Germany and Austria.
Meanwhile, research by the Global Sustainable Investment Alliance (GSIA) in January suggested that $13.6 trillion (£8.6 trillion) was invested sustainably worldwide.