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Responsible Investing – no dent in demand, but more work to do

We hear questions from US-based organizations on the politicization of ESG – is it deterring new responsible investing? I’m purposefully blending the two terms – 'ESG' and 'Responsible' (one could toss in 'Sustainable' too!) – as we’ve seen some in the asset management industry lately shift ('re-shift?') to the latter phrase, given perceived issues with the former among some audiences.

Recent data from Morgan Stanley suggests interest is not abating, but the US and Asia remain minor players relative to Europe’s huge demand.

First, Morgan Stanley notes, data suggests continued growing interest in ESG, as shown in the chart below of “ESG” Google search activity:

…And second, fund launches continue – with 96 new ESG funds launched in the first months of the year, 32% in Europe, 32% in Asia and 28% of launches in the US. Today, Europe accounts for 85% of global ESG assets under management, representing nearly 30% of total European assets, far surpassing the US and Asia, where ESG assets represent under 10% of regional assets.

The take-away: don’t be deterred by headlines – responsible investing continues, though the data suggest the US has a long way to go.

FaithInvest research update! We’re currently in the process of updating our research for the Good Intentions paper, and here's an early preview: we’ve more than doubled the faith investment policy and guideline (IP&G) data set since the last study from 2021. The overall results also suggest 'more work to do' for faith investors; just 55% of faith IP&Gs explicitly state a role for faith values in investing, down from nearly 70% in the prior report. More to share at the June 1 FCI Interest Group Forum.


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