11.2% of all investments under professional management in the US meet “sustainable” investment standards, a rise of 22% over the past two years.
Whether it’s through mutual funds or individual stocks, investors are continue to increase their exposure to companies that rate high on environmental, social and corporate governance (ESG) factors, according to the biennial report from Social Investment Forum Foundation (US SIF), which tracks these trends.
At the end of 2011, $3.74 trillion of the $33.3 trillion of assets under professional management in the US reflect ESG concerns.
“We are moving closer to a sustainable and equitable economy,” says Lisa Woll, CEO of US SIF. “From the growth in mutual funds that consider ESG criteria and increased investment in community development banks and credit unions to increasingly large votes on shareholder proposals and the availability of sustainable investment options across asset classes, SRI strategies are on the rise in the United States.”
The US SIF Foundation report is compiled by surveying 1,110 investment management firms and institutional investors, as well as data from third-party sources.
Investors are more often considering ESG issues in company and portfolio analysis. And many are beginning to develop in-house capabilities to analyze ESG criteria.
Mutual funds that include ESG analysis in portfolio selection doubled since 2010 to $641 billion.
Community development banks have grown 74% to $30.1 billion and credit unions have grown 54% to $17.1 billion.
Interestingly, the concerns for investors related to countries their investments are tied to, such as repressive or terrorist regimes and country-specific corporate governance. About half the social investment assets are influenced by policy in Sudan (up 21% from 2010) and placement of over a trillion dollars reflect concerns over Iran (up 180%).
Environmental considerations are reflected in $636 billion of these assets, up 43% from 2010. How corporations address climate change is a criteria for 23% of the institutional asset owners.
More investors are monitoring corporate political contributions and lobbying activities, accounting for $459 billion of the assets analyzed.
Compare this year’s report to their 2010 report on sustainable investing in the US:
Here’s the US SIF 2012