Invest

Sustainable investment market booming in Germany, Austria and Switzerland

Published

10 years ago

May 9, 2014

Blue & Green Tomorrow

Sustainable investment is on the rise in central Europe, with the volume of investments screened through environmental, social and governance (ESG) criteria increasing in Germany, Austria and Switzerland by 12% in a year, according to a new study.

The latest annual report by Forum Nachhaltige Geldanlagen (FNG) – the sustainable investment forum for the three countries – shows that the market in now totals €134.5 billion (£110.1 billion).

Of the three, Austria’s individual growth is the most impressive, with the country’s sustainable investment funds and mandates increasing by 29%. Switzerland and Germany both recorded growth of 17%.

“The sustainable investment markets in Germany, Austria and Switzerland have been showing positive growth for years”, said Volker Weber, chair of the board of directors at FNG.

He added, “Sustainable investments enable investors to align their financial goals with their particular values.

“In academic and political circles, sustainable investments are also increasingly being perceived as important drivers of sustainable development. The focus of attention is now shifting increasingly to the impact of sustainable investments.”

The report also finds that institutional investors have played a major role in driving the expansion trend.

Claudia Tober, FNG’s executive director, said, “In Switzerland and Austria, corporate pension funds are the most frequent investors in sustainable investment solutions, while in Germany religious institutions and charitable organisations account for the lion’s share of sustainable investments.

The interest of private investors is also reflected in the figures however, holding 41% of the market in Switzerland, 25% in Germany and 14% in Austria.

Another recent review of sustainable investment, from AXA Investment Management (AXA IM) noted that the market was “gaining momentum.” Last year, the volume of responsible investment assets managed by AXA IM grew by 18%.

More research has recently linked sustainability to investment stability, finding that firms that invest in corporate social responsibility (CSR) initiatives see less risk in their stock prices during economic downturns.

A separate study also found that companies with positive sustainability records are valued higher by investors.

Highlighting the need for change in Blue & Green Tomorrow’s Guide to Sustainable Investment 2014, Alice Evans, lead manager of F&C Asset Management’s Global Thematic Opportunities fund, said, “As the future isn’t going to look like the past, we need to think differently about investment for the long-term.

“The global population tripled over the course of the last century and is forecast to increase another 50% by 2050, and huge nations are transitioning to industrial economies for the first time. The challenges of climate change and pressures on natural resources are steadily increasing.

“Against this backdrop, companies that are thinking ahead, navigating these challenges, aligning their interests with society and bringing solutions will create more sustainable value. In other areas of our lives we make choices that are consistent with our values – how we save and invest for the future should be no exception.”

Photo: iprole via Freeimages