Key Takeaways
- Global ESG assets under management grew to $35.3 trillion in 2020, a 15% increase from 2019.
- The ESG investing market is projected to reach $53 trillion by 2025, representing one-third of total assets under management.
- In 2022, sustainable investment assets worldwide hit $30.3 trillion, up 16% from the previous year.
- Worldwide ESG AUM hit $40 trillion in 2023, 36% of total.
- U.S. sustainable funds inflows reached $85 billion in 2022.
- European ESG equity funds saw €50 billion inflows in H1 2023.
- 90% of S&P 500 companies published ESG reports in 2023.
- 78% of Fortune 500 firms have Chief Sustainability Officers.
- Average ESG disclosure score for Russell 3000 was 45/100 in 2023.
- ESG funds outperformed benchmarks by 1.2% annualized 2018-2023.
- MSCI World ESG Leaders Index beat MSCI World by 2.5% over 5 years to 2023.
- Low-carbon indices returned 8.5% vs 7.2% for broad market 2022.
- EU SFDR funds AUM €5 trillion, 20% growth.
- SEC climate disclosure rules finalized for 2024 filing.
- EU CSRD applies to 50,000 companies from 2024.
The ESG investing industry is expanding rapidly worldwide, reaching over $40 trillion in assets under management by 2023.
Corporate Practices
- 90% of S&P 500 companies published ESG reports in 2023.
- 78% of Fortune 500 firms have Chief Sustainability Officers.
- Average ESG disclosure score for Russell 3000 was 45/100 in 2023.
- 65% of global companies aligned with UN SDGs in reporting.
- Scope 3 emissions reporting adopted by 40% of FTSE 100 firms.
- 55% of EU firms comply with CSRD draft standards.
- Diversity on boards: 30% women in S&P 500 by 2023.
- 70% of CAC 40 companies have net-zero targets.
- Employee ESG training implemented by 60% of large corps.
- Supplier ESG audits conducted by 75% of top 2000 firms.
- 85% of investors consider ESG in corporate engagement.
- Water stewardship programs in 50% of consumer goods cos.
- Circular economy initiatives by 40% of manufacturing firms.
- Human rights due diligence by 35% of multinationals.
- Anti-corruption training for 90% of employees in avg firm.
- ESG-linked executive pay in 45% of European firms.
- Biodiversity targets set by 25% of mining companies.
- Just transition plans published by 20% of energy majors.
- Community investment averaged 1% of profits in extractives.
- Pay gap reporting: 60% of UK listed companies.
- Climate lobbying alignment checked by 30% of investors.
- TCFD adoption rate: 80% among largest asset owners.
- SASB standards used by 50% of U.S. public companies.
- GRI framework in 70% of global sustainability reports.
- ISSB standards piloted by 15% of firms in 2023.
- ESG-linked bonds issued by 200 corporations totaling $200B.
- ESG score average for tech sector: 65/100 MSCI.
- Oil & gas sector ESG score: 35/100 average.
Corporate Practices Interpretation
Financial Performance
- ESG funds outperformed benchmarks by 1.2% annualized 2018-2023.
- MSCI World ESG Leaders Index beat MSCI World by 2.5% over 5 years to 2023.
- Low-carbon indices returned 8.5% vs 7.2% for broad market 2022.
- ESG small-cap funds averaged 12% return vs 10% traditional 2023.
- Green bonds yielded 0.5% premium over conventional in 2023.
- Sustainability-themed equities up 15% in 2023 vs 10% S&P.
- Impact investing returned 6.5% net IRR over 10 years to 2023.
- ESG integration strategies outperformed by 0.8% p.a. 5-yr.
- European ESG funds averaged 9% return vs 7.5% peers 2023.
- U.S. ESG large-cap growth: 14.2% vs 12.8% 2023.
- Emerging markets ESG index +11% vs +8% benchmark 2023.
- Socially responsible funds Sharpe ratio 1.2 vs 1.0 market.
- ESG fixed income spread tightened by 20bps in 2023.
- Private equity ESG funds 15% IRR vs 13% traditional.
- Real estate ESG properties 5% higher rents.
- Carbon-intensive exclusions boosted returns 1.5% 5-yr.
- Gender diversity premium: 2% higher ROE.
- Governance score correlation with Tobin's Q: 0.25.
- EU Taxonomy-aligned activities 10% cost of capital reduction.
- High ESG rating firms 4% less volatile.
- Net-zero portfolios alpha 1.1% over 3 years.
- Sustainable aviation fuel investments 12% return projection.
- Renewable energy yieldcos 8% dividend yield.
- ESG hedge funds 9.5% return vs 8% peers 2023.
- SFDR Article 9 funds +10.5% 2023.
Financial Performance Interpretation
Investment Trends
- Worldwide ESG AUM hit $40 trillion in 2023, 36% of total.
- U.S. sustainable funds inflows reached $85 billion in 2022.
- European ESG equity funds saw €50 billion inflows in H1 2023.
- BlackRock's ESG ETFs attracted $20 billion in 2022.
- Vanguard ESG funds AUM grew to $50 billion by 2023.
- State Street Global Advisors ESG strategies managed $100 billion.
- CalPERS ESG allocation was 10% of $500 billion portfolio in 2023.
- Norway's Government Pension Fund Global ESG screens 93% of holdings.
- APG (Dutch pension) committed €30 billion to ESG in 2022.
- Goldman Sachs ESG funds raised $15 billion in 2023.
- JPMorgan ESG sustainable finance hit $300 billion commitments.
- HSBC pledged $750 billion to sustainable finance by 2030.
- Millennium Challenge Corp invested $10 billion in ESG projects 2022.
- Temasek (Singapore) ESG portfolio valued at SGD 100 billion.
- Qatar Investment Authority ESG targets 20% by 2025.
- Abu Dhabi Investment Authority ESG AUM $50 billion.
- Caisse de dépôt (Canada) ESG integration across CAD 400 billion.
- Ontario Teachers' Pension Plan ESG $100 billion exposure.
- AustralianSuper ESG commitments AUD 30 billion.
- Aware Super (Australia) 100% ESG screened AUD 150 billion.
- UniSuper ESG funds AUD 20 billion.
- Norges Bank ESG exclusions on 150 companies.
- PGGM (Netherlands) €80 billion sustainable investments.
- AMF (Sweden) SEK 700 billion with ESG focus.
- Ilmarinen (Finland) €60 billion ESG assets.
- Varma (Finland) 50% ESG portfolio.
Investment Trends Interpretation
Market Growth
- Global ESG assets under management grew to $35.3 trillion in 2020, a 15% increase from 2019.
- The ESG investing market is projected to reach $53 trillion by 2025, representing one-third of total assets under management.
- In 2022, sustainable investment assets worldwide hit $30.3 trillion, up 16% from the previous year.
- Europe's ESG funds saw inflows of €105 billion in 2021, dominating global sustainable fund flows.
- The number of ESG-focused ETFs globally increased by 45% from 2020 to 2022, reaching over 500 funds.
- ESG bond issuance worldwide reached $500 billion in 2021, a 25% rise year-over-year.
- Asia-Pacific ESG assets grew at a CAGR of 20% from 2018-2022, outpacing other regions.
- U.S. ESG funds managed $4.5 trillion in AUM as of 2023, doubling since 2018.
- Global sustainable funds numbered 7,000 in 2022, up from 4,500 in 2019.
- ESG thematic investing captured 12% of total ETF AUM in 2023.
- Projected ESG market size by 2030 is $75 trillion, driven by millennial investors.
- In 2023, ESG funds attracted $350 billion in net new inflows globally.
- Latin America ESG AUM grew 30% YoY in 2022 to $1.2 trillion.
- Number of ESG indices worldwide exceeded 1,000 by end-2022.
- ESG mutual funds in Europe managed €3 trillion in 2023.
- Global green bond market expanded to $1 trillion cumulative issuance by 2023.
- ESG venture capital investments hit $20 billion in 2022.
- Middle East sovereign wealth funds allocated 15% to ESG by 2023.
- Canadian ESG AUM reached CAD 400 billion in 2022.
- Australian superannuation funds with ESG mandates control AUD 1 trillion.
- Indian ESG mutual fund AUM grew 50% to INR 50,000 crore in 2023.
- South African ESG investments topped ZAR 500 billion in 2022.
- Chinese green finance market valued at RMB 20 trillion by 2023.
- Brazilian sustainable funds AUM hit BRL 100 billion in 2023.
- Singapore's ESG investment pools reached SGD 50 billion in 2022.
- Nordic ESG funds dominated with 70% market share in region AUM.
- Japanese GPIF allocated 5% of $1.4 trillion to ESG in 2023.
- UK ESG pensions managed £400 billion in 2023.
- French Article 173 reporting covered €7 trillion AUM in 2022.
- Global ESG private equity dry powder reached $150 billion in 2023.
Market Growth Interpretation
Regulatory Developments
- EU SFDR funds AUM €5 trillion, 20% growth.
- SEC climate disclosure rules finalized for 2024 filing.
- EU CSRD applies to 50,000 companies from 2024.
- ISSB standards adopted by IOSCO for global use.
- UK's TCFD mandatory for premium listed from 2021.
- Singapore green bond grant scheme issued 50 bonds.
- China's green bond catalogue endorsed 200 projects.
- Brazil's sustainable finance taxonomy launched 2023.
- Japan's Stewardship Code signatories: 500 institutions.
- South Korea K-ESG guidelines for 800 listed firms.
- IFRS Sustainability Standards effective 2024.
- U.S. DOL ESG rule allows consideration in 401(k).
- EU Taxonomy delegated act covers gas/nuclear.
- Hong Kong green bond program $10B issuance.
- Australia's mandatory climate reporting 2024.
- Canada's ISSB-aligned disclosure proposed.
- France's PACTE law: 100% Article 173 compliance.
- Netherlands mandatory TCFD from 2024.
- Sweden AP funds ESG mandate strengthened.
- Belgium ESG labeling regime for funds.
- SECURE 2.0 Act ESG in retirement plans.
Regulatory Developments Interpretation
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