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ESG considerations gaining traction with fund managers, but returns are mixed

Jeffrey Tan
Jeffrey Tan11/6/2017 08:00 AM GMT+08  • 6 min read
ESG considerations gaining traction with fund managers, but returns are mixed
(Nov 4): Environmental, social and governance (ESG) considerations are becoming increasingly important elements in the investment strategies and philosophies of mutual funds. According to the Global Sustainable Investment Alliance, US$22.9 trillion ($31.1
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(Nov 4): Environmental, social and governance (ESG) considerations are becoming increasingly important elements in the investment strategies and philosophies of mutual funds. According to the Global Sustainable Investment Alliance, US$22.9 trillion ($31.13 trillion) worth of assets were being professionally managed under responsible investment strategies last year. This number represents a 25% increase from 2014, and 26% of all professionally managed assets globally, according to GSIA’s Global Sustainable Investment Review 2016. GSIA is an international collaboration of membership-based sustainable investment organisations.

Europe, one of the largest regions for assets committed to sustainable and responsible investment strategies, saw growth of 12% to US$12 trillion in assets from 2014 to 2016. GSIA says 53% of professionally managed assets in Europe now use responsible investment strategies.

The US — another large region — recorded 33% growth to US$8.7 trillion of assets committed to sustainable and responsible investment strategies from 2014 to 2016. Of this, US$8.1 trillion is held by institutional investors, money managers and community investment institutions that apply various ESG criteria in their investment analysis and portfolio selection.

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