Sustainable, responsible, and impact (SRI) investing in the US has gone up by 76% over the past two years, according to a report released this week by The Forum for Sustainable and Responsible Investment (US SIF). It increased from $3.74 trillion in 2012 to $6.57 trillion by 2014. SRI investing has rocketed up by almost ten times the amount in 1995 when US SIF first started releasing reports.
In terms of funds that include environmental, social and governance (ESG) factors in investment screening, both the number of funds and total assets under management grew considerably since the last report in 2012. Starting in 2012 with $1.01 trillion AUM in 720 funds that met this benchmark, the numbers increased to $4.31 trillion AUM in 925 funds in 2014, a four fold jump in AUM.
This significant growth in SRI is informed by some key trends over the past few years. Some of these include increased demand for ESG values from investors. 80% of responding money managers cited demand as the strongest motivator for SRI investing. There has also been growing commitment from institutional investors to the Principles for Responsible Investment (PRI), which requires ESG integration. Another influential factor is growing concern about climate change, policies that restrict and or call for divesting fossil fuels.
You can access an executive summary and the full report here.